🇲🇽 Hiring in Mexico

💡 Everything you need to know to hire and manage employees in Mexico through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 3-5 business days between submitting a new hire and their start date. The employee provides their tax ID (RFC), CURP, and social security number, and Toku completes registration with the Mexican authorities before they start.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, you pay the following employer contributions in Mexico (calculated on the registered contribution salary, capped at 25 UMA):

As a rule of thumb, total cost of employment is roughly 120-125% of gross salary, before the mandatory aguinaldo (at least 15 days' extra salary each December), the 25% vacation premium on vacation days taken, and statutory profit sharing (PTU, 10% of pre-tax profits with a cap of three months' salary).

Employees pay their own income tax (ISR, progressive rates from 1.92% to 35%) and small IMSS contributions of roughly 2.4% of their registered salary. These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Payroll in Mexico is monthly. Toku runs one payroll per month, and employees receive a digitally stamped, tax-compliant payslip each cycle. Salaries are paid in MXN by bank transfer.

Mexico sets its minimum wage per day: MXN 315.04 for 2026 generally, and MXN 440.87 in the Northern Border Free Zone. The aguinaldo (at least 15 days' salary) must be paid by December 20 each year, prorated for employees with less than a full year of service. PTU profit sharing, where applicable, is distributed by May 30.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, in Spanish (bilingual versions available; the Spanish text prevails in a dispute).
• Indefinite-term employment is the default. Fixed-term contracts are only valid where the nature of the work genuinely requires a set duration, and repeated renewals can be reclassified as indefinite.
• Probation is 6 months per Toku's employment agreement, in line with the 180-day maximum Mexican law allows for managerial and specialized technical roles (the general statutory limit is 30 days).

Working Hours

The day shift maximum is 8 hours per day and 48 hours per week (night shifts 7 hours, mixed shifts 7.5), with at least one rest day per week. A phased reform will reduce the maximum week to 46 hours from 2027, then 2 hours per year until it reaches 40 hours in 2030. Overtime is voluntary and expensive: the first 9 weekly overtime hours pay double, anything beyond pays triple, and work on a public holiday pays triple the daily wage. Remote employees are entitled to proportional reimbursement of electricity and internet costs, necessary equipment, and the right to disconnect.

Leave Entitlements

Vacation days cannot be exchanged for pay while employed. Sick and maternity pay are funded by IMSS rather than the employer, based on the employee's registered contribution salary.

Public Holidays (2026)

Mexico has 7 mandatory paid public holidays. Three of them follow a movable Monday system to create long weekends, holidays falling on a weekend are not moved, and employees who work a holiday receive triple pay. Bank holidays such as Holy Week and Day of the Dead are observed by financial institutions but are not mandatory.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): IMSS health coverage for the employee and their dependents, INFONAVIT housing credits, SAR retirement savings, the aguinaldo, PTU profit sharing, the 25% vacation premium, and a 25% Sunday premium for employees who regularly work Sundays.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Other common extras in Mexico include private major medical insurance, life insurance, savings funds (fondos de ahorro, tax-advantaged with employer matching up to 13% of salary), meal vouchers, transportation allowances, and extra vacation days. Toku can advise on how each of these affects your total cost.

Ending Employment

Mexico does not recognize at-will employment: dismissal requires just cause as defined in the Federal Labor Law, documented in a written notice served within 30 days of the employer learning of the conduct. If just cause cannot be proven, the employee can choose reinstatement with back pay or full severance, so involve Toku early whenever you are considering a termination. For the process, see How to Terminate an Employee or Contractor.

Mexico has no statutory notice period; costs are driven by severance instead:

In practice, most exits without provable just cause are settled at or near the full severance package. Pregnant employees, employees on maternity or sick leave, and union representatives have added protections.

Hiring Someone from Overseas?

Foreign nationals generally need a temporary resident visa with work permission, and the employer must obtain authorization from the National Immigration Institute before the candidate applies at a Mexican consulate. Processing typically takes 2-8 weeks, and USMCA professionals from the US and Canada benefit from dedicated categories. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.