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Country Payroll Guide Mexico
We deliver secure, compliant, accurate and touchless global payroll for Mexico.
Key Facts
- Capital
- Mexico City
- Date format
- dd/mm/yyyy
- Currency
- Mexican Peso (MXN)
- VAT
- the standard rate is 16%
Contributions
Employers
- Sickness & Maternity
- Sickness & Maternity - 5.25%
- Disability & Death
- Disability & Death - 1.75%
- Retirement
- Retirement - 2%
- Layoff & Retirement Benefits
- Layoff & Retirement Benefits - 1.75%
- Child Care
- Child Care - 1%
- Work Related Accidents
- Work Related Accidents - 0.5% to 3%
- Housing Tax
- Housing Tax - 5%
- Payroll State Tax
- Payroll State Tax - 0.5% to 3%
- Total Employment Cost
- Total Employment Cost - 22.75%
Employees
- Sickness & Maternity
- Sickness & Maternity - 5.25%
- Disability & Death
- Disability & Death - 1.75%
- Layoff & Retirement Benefits
- Layoff & Retirement Benefits - 3.15%
- Total Employee Cost
- Total Employee Cost - 10.15%
Minimum Wage
- Minimum Wage
- The minimum wage in Mexico is 141.70 MXN per day.
Payroll
- Payroll Cycle
- Bi-Weekly
- 13th Salary
13th and 14th salaries are not required by law, but a common practice.
Income Tax
- Employee Income Tax (1)
- Up to 7,735.00 MXN - 1.92%
- Employee Income Tax (2)
- 7,735.00 - 65,651.07 MXN - 6.40%
- Employee Income Tax (3)
- 65,651.07 - 115,375.90 MXN - 10.88%
- Employee Income Tax (4)
- 115,375.90 - 134,119.41 MXN - 16.00%
- Employee Income Tax (5)
- 134,119.41 - 160,577.65 MXN - 17.92%
- Employee Income Tax (6)
- 160,577.65 -323,862.00 MXN - 21.36%
- Employee Income Tax (7)
- 323,862.00 - 510,451.00 MXN - 23.52%
- Employee Income Tax (8)
- 510,451.00 - 974,535.03 MXN - 30.00%
- Employee Income Tax (9)
- 974,535.03 - 1,299,380.04 MXN - 32.00%
- Employee Income Tax (10)
- 1,299,380.04 - 3,898,140.12 MXN - 34.00%
- Employee Income Tax (11)
- Over 3,898,140.12 MXN - 35.00%
Working Hours
- General Working Hours
8 hours daily, 48 hours weekly.
- Overtime
Employees can work up to 9 hours exempt per week. The following 9 hours will be paid at a rate of 200% salary, with any hour beyond that paid at a rate of 300%.
Leave
- Paid Time Off
Mandatory vacations, no carryover policy:
- 1 year seniority = 6 days
- 2 years seniority = 8 days
- 3 years seniority = 10 days
- 4 years seniority = 12 days
- 5 to 9 years seniority = 14 days
- 10 years or above – additional 2 days per 5 years
- Public Holidays
8 days.
- Sick Days
No minimum requirement by law.
- Maternity Leave
Up to 3 months of leave fully paid by social security.
- Paternity Leave
1 week of leave fully paid by the employer.
Termination
- Termination Process
ER must always provide a reason for termination. Otherwise, the termination may be deemed without cause.
- Notice Period
No notice period required.
- Severance Pay
Voluntary resignation: the employer must pay the employee all benefits that are due. If the employee has 15 years or more of seniority, the employee is entitled to 12 days’ salary for each year employed. Termination with cause: The employer must pay the employee all benefits that are due. In addition, 12 days of salary for each year employed. Termination without cause: 3 month’s salary, 20 days for each year in the company, and a seniority bonus of 12 days per year of service. The employee will also receive back salary from the date of dismissal to the day that the employer complies with the Labor Board’s decision.
- Probation Period
Optional, usually 3 months.
Visa
- Employment Visa
To get a work permit in Mexico, a candidate would first need to apply for a residence visa, which can be temporary (6 months to 4 years) or permanent. After that, a work permit can be obtained by applying to the Instituto Nacional de Migración (INM) for permission to work.
