Mexico 🇲🇽
Congratulations on your decision to hire employees in Mexico! With its rapidly growing economy and skilled workforce, Mexico stands as a dynamic hub for business expansion in Latin America. The country's strategic geographic location — a bridge between North and South America — and its participation in key trade agreements make it an attractive destination for international businesses. Plane simplifies the hiring process for you by offering automated tax document collection, payroll, benefits administration, and more, while ensuring compliance and maximum efficiency. Still, hiring in a new country can pose certain challenges, so we’ve put together the following guide on how to navigate the process of hiring in Mexico.
Currency
MXN
Onboarding
2.5 to 4 weeks
Employer Cost
38%
Pay Frequency
Semi-monthly
Public Holidays
9+
5 Considerations Before Hiring in Mexico
As an employer in Mexico, it is important to have a comprehensive employment contract that outlines the terms and conditions of the employment relationship. The contract should include need-to-know info on compensation, benefits, vacation time, and sick leave policies. Before onboarding a new employee in Mexico, take a moment to consider the following:
Getting Started with Hiring in Mexico
Employment Contract
In Mexico, employment contracts are crucial for defining the terms and conditions of employment between an employer and an employee. Employment contracts must comply with Mexican labor law and any applicable collective bargaining agreements.Employers may use three types of employment contracts:
- Indefinite Contracts: The most common type of contract, it doesn't have a specified end date and offers job security to the employee.
- Fixed-Term Contracts: Used for temporary, short-term work, such as a task or project or to substitute for an employee. No limits on duration or renewal, as the length is determined by the nature of the work.
- Seasonal Contracts: For a fixed period or season, or intermittent work.
Payroll Timelines and Dates
Pay Frequency: Employee payroll is semi-monthly, with 24 pay periods per year. Pay is distributed on the 15th, and the last business day of the month.Payroll Change Cutoff Dates: To meet payroll deadlines, any changes must be submitted to support@plane.com by the cutoff date. For Mexico, the payroll change cutoff date is on the last business day of the previous month. For example, changes to June payroll would need to be received no later than May 31, if May 31 is a business day.Plane sends payroll summaries to admins at the end of the second week of the month. After that, charges are automatically debited. Payroll summaries are also available to admins in their Plane accounts. Payday may vary based on country requirements.
Working Hours
The typical workweek for a full-time employee is capped at 48 hours per week. Typically, this is broken down into 8 hours per day, Monday to Saturday. For office workers, the standard workweek is usually 40 hours, 8 hours per day, Monday through Friday.Any hours worked beyond the standard workweek are considered overtime. The first 9 hours of overtime per week are paid at double the employee’s normal hourly rate, and overtime above 9 hours should be compensated with triple pay.Employees are entitled to at least one rest day after six consecutive days of work, usually on Sunday. Employees who work on Sundays are entitled to at least 25% additional salary. If employees must work on their designated rest day or a public holiday, they’re entitled to double pay for that day.Employees are also entitled to a rest break, usually of at least 30 minutes, during their workday, though this is not counted as part of the working time.
Public Holidays
Mexico has 9 public holidays:
- New Year’s Day
- Mexican Constitution Day
- Benito Juarez Day
- Holy Thursday*
- Good Friday*
- Labor Day
- Independence Day
- Revolution Day
- Christmas
Compensation
We recommend using Plane's Remote Compensation Tool to check remote salary data in Mexico by job title.Keep in mind that there is a mandatory 13th month bonus (or Christmas bonus) paid at the end of the year, with a minimum payment of 15 days of an employee’s salary. However, it’s common to offer one month’s salary. If the employee starts during the year, the 13th month salary will be prorated.
Health Insurance Benefits
Mexico has universal public health insurance through the Mexican Social Security Institute (IMSS). Enrollment in IMSS is mandatory for all employees. Employers are responsible for registering their employees with IMSS and contributing a portion of their payroll to the system.To complement the public system, many employers in Mexico offer private health insurance as a benefit to their employees. Private health insurance typically provides shorter waiting times, more comprehensive coverage, access to private hospitals and clinics, and additional health services not covered by IMSS.Plane offers supplemental healthcare benefits for employees in Mexico through BUPA Global.
Sick Leave
Employees in Mexico are entitled to up to 78 weeks of sick leave if they are unable to work due to illness or injury. During sick leave, the employment contract is suspended and employers do not need to pay employees. Instead, eligible employees may receive Social Security benefit payments for up to 52 weeks, with extensions possible for another 26 weeks pending approval by Social Security. Employees on sick leave are protected from termination due to illness.
Vacation Leave
Employees in Mexico are entitled to 12 days of paid vacation after completing 12 months of service with the same employer. The amount of vacation leave entitlements increases by 2 working days per subsequent year of service, up to 20 days maximum. After 6 years of service, vacation leave increases by 2 days for every 5 years of service.Employees may split vacation at their discretion, but are entitled to take at least 6 consecutive days of vacation. It must be taken within 6 months following the year during which it was accrued. Employers may not pay compensation in lieu of vacation leave, except in cases of termination.Employees are entitled to a 25% additional vacation premium bonus for vacation.
Maternity / Paternity / Parental Leave
Maternity leave in Mexico totals 12 weeks, typically divided as six weeks before the expected date of childbirth and six weeks after. However, with medical authorization, this distribution can be adjusted, provided that at least four weeks of leave are taken after childbirth.During maternity leave, the pregnant employee receives 100% of their salary, paid by the Mexican Social Security Institute (IMSS), based on their registered salary with the IMSS. To be eligible for this benefit, the employee must be a registered contributor to the IMSS with at least 30 weekly contributions in the 12 months before they receive the benefits. If the employee is not eligible for Social Security benefits, the employer must pay the employee’s maternity leave salary.Maternity leave also includes job protection rights, ensuring that the mother can return to the same position or an equivalent one with the same remuneration.After returning to work, breastfeeding mothers are entitled to two extra 30-minute breaks per day to breastfeed their child for up to six months.Paternity leave in Mexico is relatively shorter. Partners are entitled to five days of paid leave immediately following the birth or adoption of a child. Paternity leave is paid by the employer. Some companies in Mexico may choose to offer more extended paternity leave than the statutory requirement as part of their benefits packages.Adoption leave is also recognized in Mexico. Adoptive parents are entitled to six weeks of paid leave after the day they adopt a child.
Employment / Termination
Termination of employment in Mexico is governed by strict labor laws. Please inform us at least 30 days in advance of any termination so that we can arrange the documentation and final payments in a timely manner.At Plane, we process involuntary offboarding via Mutual Termination Agreement (MTA) as a common practice that enables an employer to terminate an employee while trying to minimize the risk of litigation and cost. It is a separation agreement including unused leave, notice period, severance, and terms negotiated between the parties in exchange for a waiver where an employee waives their right to challenge a termination as unfair or unlawful. The notice period varies based on the length of employment.It is important to note that Plane often cannot facilitate unilateral terminations or dismissals. These types of termination are a potential source of litigation that can expose employers to increased damages and other costs. Also, the reason for these terminations may not be valid for an employer of record. The notice period varies based on the length of employment.We ask that you give us as much notice as possible and involve us right from the beginning of the process so we can better support and guide you through the process. Involuntary termination can take time to negotiate with the employees to mutually agree and end on good terms. Here you can find additional information on how to terminate an employee.Notice period: Notice periods can only be enforced if mutually agreed upon in an employment contract in advance by both employer and employee. Otherwise, there is no obligation for either party to provide notice. Severance pay is applicable when an employee is terminated without a valid legal reason. Employees who resign are not eligible for severance pay, unless their resignation has justifiable cause attributed to employer misconduct. Severance pay for employees terminated without just cause consists of three parts:
- 90 days of the employee’s regular salary.
- 20 days per year of service, prorated if necessary for employees with less than one year of service (i.e., if an employee works for six months, only 10 days of severance pay is due).
- Payment of accrued benefits, including proportional 13th month salary, unused vacation days, and vacation premiums.
- Seniority premiums of 12 days per year of service if the employee has worked at least 15 years for the employer.
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Annual cost of employment*
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| Salary | Taxes (32.65%) | Total | |
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| Monthly | 0BRL | 0BRL | 0BRL |
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*rates for: December 11, 2024
Once you have sorted out the details mentioned above, you can add the employee to the Plane platform. We provide a step-by-step workflow that shows what tasks need to be completed, as well as real-time updates and notifications. This way, you can stay on top of the hiring process at all times. With Plane, you can confidently hire, knowing that you have a powerful platform at your disposal to manage the entire process from start to finish. Here are the instructions for adding a new employee to the platform:
How to hire and onboard an employee
Plane offers a guided process for administrators and managers to hire and onboard their new employees...
Learn moreHiring an employee in a new country can be a complex process, but with the right guidance and resources, it can be a smooth and successful transition. At Plane, we're committed to helping you navigate the process of hiring an employee in Mexico. We'll keep you informed and up-to-date with the latest regulations and employment laws.Best of luck with your new hire, and welcome to Mexico!
Frequently Asked Questions
Here are the answers to some common questions about hiring employees in Mexico with Plane:
Leave Laws and Holidays in Mexico: A Guide for US Companies
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Mexico Employment Laws: A Guide for US Companies Hiring Abroad
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