Employer of record in Mexico: cost and rules (2026)
Employing someone in Mexico costs the employer about 32.1% on top of gross salary in statutory contributions, plus an EOR fee of $199 to $699 per month at providers that publish prices ("from" prices). Example: a gross salary of MXN 40,000 per month costs MXN 52,853 per month (about $2,838) before any EOR fee.
Estimates only, not tax, legal or accounting advice. Statutory rates, limits and provider prices change; check the linked sources and ask a qualified adviser before you hire.
Employer contributions in Mexico
Minimum wage: MXN 9,582 per month. General zone 315.04 MXN a day from 1 Jan 2026, converted to a month at 30.4167 days. The northern border free zone has its own higher rate of 440.87 MXN a day (13,409.80 a month). Published in the Official Gazette (DOF) on 9 Dec 2025. Source: CONASAMI (gob.mx) - salarios minimos vigentes desde 1 enero 2026
Worked example: MXN 40,000 gross per month
| Item | Base (MXN) | Per month (MXN) |
|---|---|---|
| IMSS sickness & maternity - fixed quota (cuota fija) | fixed | 728 |
| IMSS sickness & maternity - excess over 3 UMA | 29,804 | 344 |
| IMSS sickness & maternity - cash benefits (prestaciones en dinero) | 40,000 | 294 |
| IMSS sickness & maternity - medical care for pensioners | 40,000 | 441 |
| IMSS disability & life (invalidez y vida) | 40,000 | 735 |
| IMSS childcare & social benefits (guarderias y prestaciones sociales) | 40,000 | 420 |
| Retirement (retiro, AFORE) | 40,000 | 839 |
| Employer share of old-age pension (cesantía en edad avanzada y vejez), band 4.01 UMA and above | 40,000 | 3,153 |
| Work-risk insurance (riesgo de trabajo), class I average premium | 40,000 | 228 |
| INFONAVIT housing fund (employer 5%) | 40,000 | 2,099 |
| State payroll tax (ISN) - Mexico City | 40,000 | 1,600 |
| Aguinaldo (Christmas bonus), 15 days minimum | 40,000 | 1,644 |
| Vacation premium (prima vacacional) 25% | 40,000 | 329 |
| Gross salary | 40,000 | |
| Total employer cost (mandatory items) | 52,853 |
Contractor, EOR or own entity in Mexico
| Option | Per month | Per month (USD) | Per year | Notes |
|---|---|---|---|---|
| Contractor | MXN 40,354 to 40,912 | $2,167 to $2,197 | MXN 484,245 to 490,949 | No employer contributions. Misclassification risk. Includes contractor-platform fee range. |
| Employer of record | MXN 56,558 to 65,868 | $3,037 to $3,537 | MXN 678,696 to 790,418 | Salary + statutory costs + EOR fee range. |
| Own legal entity | MXN 52,853 | $2,838 | MXN 634,230 | Salary + statutory costs. Setup, accounting and legal costs are not estimated. |
Contractor
Mexican law treats any personal, subordinated work paid with a salary as employment, whatever the contract is called, and presumes an employment relationship between the person who works and the person who receives the work. A contractor who works set hours for one client under its direction can be reclassified as an employee. A genuine independent contractor invoices (CFDI), pays their own income tax and VAT, and there are no employer social-security costs. (LFT arts. 20 and 21.)
Own entity
Since the 2021 outsourcing reform, supplying workers to another company is prohibited. Only specialised services or works that are not part of the client's main activity may be subcontracted, and the contractor must be on the STPS register (REPSE), renewed every three years; the client is jointly liable if the contractor fails its labour obligations. This limits how employer-of-record models can work in Mexico: they must be structured as registered specialised services. No sourced figures on company set-up costs or timelines are included. (LFT arts. 12-15.)
Leave, notice, probation and termination
Annual leave: 12 days (Working days of paid vacation: 12 in the first year, then 2 more days for each year up to 20 days in year 5, then 2 more days for every five years of service (reform in force since 1 Jan 2023). The employer also pays a vacation premium of at least 25%.). Public holidays: 7. Source: PROFEDET (gob.mx), mandatory rest days 2026; Ley Federal del Trabajo arts. 74 and 76. Seven fixed holidays a year; a further one on 1 Oct every six years (next 2030) and election days are extra.
Notice
Mexican law has no notice period for open-ended employment. An employer can dismiss only for one of the causes listed in the law, and must give the worker a written notice naming the conduct and the dates. Without a proven cause the dismissal is unjustified and the employer owes severance (see below). (LFT arts. 47 and 48.)
Probation
A trial period is allowed in open-ended contracts and in contracts longer than 180 days: up to 30 days, or up to 180 days for management, general-management and specialised technical or professional roles. It must be in writing, and during it the worker has pay, social security and benefits. (LFT art. 39-A.)
Termination
If a dismissal is unjustified, the worker can claim reinstatement or compensation of 3 months of salary plus 20 days of salary for each year of service. If the employer loses in court it also owes back pay for up to 12 months, plus interest if the case lasts longer. A seniority premium of 12 days of salary per year of service is due on dismissal, with the daily salary capped at twice the minimum wage. (LFT arts. 48, 50, 162 and 486.)
What the calculator simplifies
- IMSS and INFONAVIT contributions are based on the integrated salary (SBC). The calculator assumes only the statutory first-year benefits (15 days of aguinaldo, 12 vacation days, 25% premium), so SBC is gross pay x 1.049315, and all rates shown are the legal rate times that factor. Employers who give more aguinaldo or vacation, or other regular benefits, have a higher SBC.
- The fixed IMSS sickness quota is shown as a monthly amount using 30.4 days. Real IMSS billing uses the actual days in each month.
- The work-risk premium uses the class I average of 0.54355%. The real premium is set for each employer and can be much higher in riskier classes.
- The 2026 UMA of 117.31 MXN is used for the whole year, although it applies from 1 February (it was 113.14 MXN in January). The 25 UMA cap and the 3 UMA threshold are monthly values at 30.4 days.
- The old-age pension (cesantía y vejez) rate depends on SBC. It is modelled as eight bands with non-overlapping gross-pay ranges, so exactly one applies at any salary. The small gaps in the law's UMA bands (for example between 3.00 and 3.01 UMA) are ignored. Because the minimum wage is above 2.69 UMA, the bands below that level are never reached, and a worker on exactly the minimum wage is placed in the lowest band.
- State payroll tax (ISN) is Mexico City's 4% on gross pay only. Other states charge different rates, the tax base also includes aguinaldo and the vacation premium, and reductions exist for new or growing companies.
- Not included: employee profit sharing (PTU), meal and savings vouchers, savings funds and other optional benefits, and employee-side deductions (IMSS worker share, income tax).
- Accruals use 365 days a year. Monthly IMSS figures can differ by a few pesos from the official IMSS payment tool (SUA).
EOR provider prices
| Provider | EOR price (USD) | Contractor price (USD) | Billing and deposit | Source and checked |
|---|---|---|---|---|
| Skuad | from $199 | from $19 | Not published | price page |
| RemotePeople | from $499 | from $29 | Not published | price page |
| Deel | from $599 | from $49 | Not published | price page |
| G-P (Globalization Partners) | from $599 | from $39 | Not published | price page |
| Remote | from $599 | from $29 | Annual contracts for EOR | price page |
| Oyster | from $699 | from $29 | Monthly or annual | price page |
| Rippling | Not published | price page | ||
| Multiplier | not verified | Not verified | price page unverified | |
| Papaya Global | not verified | Not verified | price page unverified |
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Calculator for Mexico
FAQ
How much does it cost to employ someone in Mexico?
On top of gross salary, statutory employer costs add about 32.1% at a gross salary of MXN 40,000 per month. That is a total of MXN 52,853 per month before any EOR fee.
How much does an employer of record cost in Mexico?
Providers with a published price list EOR plans from $199 to $699 per month ("from" prices, checked 2026-11-13). This is on top of salary and the statutory employer costs above. Source
How much paid leave do employees get in Mexico?
Annual leave is 12 days (Working days of paid vacation: 12 in the first year, then 2 more days for each year up to 20 days in year 5, then 2 more days for every five years of service (reform in force since 1 Jan 2023). The employer also pays a vacation premium of at least 25%.), plus 7 public holidays. Source
What is the notice period in Mexico?
Mexican law has no notice period for open-ended employment. An employer can dismiss only for one of the causes listed in the law, and must give the worker a written notice naming the conduct and the dates. Without a proven cause the dismissal is unjustified and the employer owes severance (see below). (LFT arts. 47 and 48.) Source
Is there a probation period in Mexico?
A trial period is allowed in open-ended contracts and in contracts longer than 180 days: up to 30 days, or up to 180 days for management, general-management and specialised technical or professional roles. It must be in writing, and during it the worker has pay, social security and benefits. (LFT art. 39-A.) Source
What are the rules on ending employment in Mexico?
If a dismissal is unjustified, the worker can claim reinstatement or compensation of 3 months of salary plus 20 days of salary for each year of service. If the employer loses in court it also owes back pay for up to 12 months, plus interest if the case lasts longer. A seniority premium of 12 days of salary per year of service is due on dismissal, with the daily salary capped at twice the minimum wage. (LFT arts. 48, 50, 162 and 486.) Source
Sources
- CONASAMI (gob.mx) - salarios minimos vigentes desde 1 enero 2026
- Ley del Seguro Social (Cámara de Diputados, text current to the 15 Jan 2026 reform), art. 106 I and 19th transitory article
- Gobierno de México - note on the Dec 2020 pension reform: 2023-2030 employer rate table (LSS art. 168 II a and 2nd transitory article)
- Ley del INFONAVIT, art. 29 II (gob.mx copy of the Cámara de Diputados text; the law refers to the Social Security Law for the base and upper limit)
- Gaceta Oficial de la Ciudad de México no. 1566, 12 Mar 2025 (quotes art. 158 at 4% and the art. 278 reduction)
- Ley Federal del Trabajo (Cámara de Diputados), art. 87
- PROFEDET (gob.mx), mandatory rest days 2026; Ley Federal del Trabajo arts. 74 and 76. Seven fixed holidays a year; a further one on 1 Oct every six years (next 2030) and election days are extra.