Hire talent in Mexico with EOR
Our Employer of Record (EOR) services in Mexico guarantee local requirements while offering a customized response to your company’s demands without requiring the establishment of a physical organization.
- Fully licensed and compliant
- Secure and transparant payments
- Fast and worry-free
Capital City
Mexico City
Currency
Mexican Peso (MXN)
Language
Spanish
Population Size
129,388,467
Facts & Stats
Capital City
Mexico City
Currency
Mexican Peso
Language
Spanish
Ease of doing Business
Very difficult
Gross Domestic Product
1.273 trillion USD
Working Hours
40-48 hours per week
Minimum Wage
$7,380 MXN per month before taxes
Average Education Level
22.8% of 25-64 year-olds have tertiary attainment
Capital City
Mexico City
Currency
Mexican Peso (MXN)
Language
Spanish
Ease of doing Business
Very difficult
Gross Domestic Product
1.273 trillion USD
Working Hours
between 40-48 hours a week (full-time)
Minimum Wage
$7,380 MXN per month before taxes
Minimum Wage
$207.44 MXN per day
Why choose Mexico
Mexico’s strategic location, large consumer market, and cost-effective labor make it an attractive business hub. Its economic stability, business-friendly environment, and various government incentives support expansion.
For energy companies, Mexico’s rich natural resources and growing energy demand present significant opportunities. The government’s support for both traditional and renewable energy, combined with developed infrastructure and a commitment to sustainability, make Mexico ideal for energy sector investments.
The nation provides several tax breaks to companies who are currently growing into Mexican territory. To do away with economic barriers between the three nations, Mexico has also ratified the North American Free Economic Agreement (NAFTA) with the United States and Canada.
How EOR in Mexico works
Understanding the different types of employment contracts is essential before starting work in Mexico, as it ensures that both parties are well informed and protected under Mexican employment law.
Determinate duration
- Another name for these agreements is fixed-term agreements. Here, the duration of the employment is mutually agreed upon by the employer and employee.
- The worker will be expected to complete their assigned tasks and work within the allotted time. Article 37 of the Mexican Labor Law, however, stipulates that employers are only permitted to offer fixed-term contracts if the employment contract clearly outlines the type of work to be performed.
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Indeterminate-duration contracts
These contracts are typically given to workers who are employed by the company on a permanent basis. Only when an employee is fired by the company or leaves voluntarily by sending a formal resignation letter does the agreement end.
You can hire varied workers to join your team if you are opening a business in Mexico. Payroll setup is a prerequisite for bringing on new hires to your Mexican business. If your business operates in Mexico, you absolutely must have a standard payroll procedure in place. The payroll must abide by all national laws and regulations.
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Why businesses choose us
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What you can expect
Hiring through an EOR in Mexico involves several crucial steps to ensure compliance and efficiency in your hiring process:
No need to limit your growth
We can assure a compliant legal entity for your business to grow in the country of your choice.
Get support to set up an entity in
Mexico
Choose between establishing a legal entity or utilizing an EOR service to do so based on factors like resources, company size, and expansion plans. Setting up a legal entity requires registration, bank account opening, and compliance with local laws, while an EOR supports you in making this process more seamless.
Choose the best EOR in Mexico for your business
Hire and onboard your employees
Gather essential employee information, including personal details, salary, and employment status, and provide it to the EOR to begin the onboarding process. Ensure compliance with Mexican employment laws, including mandatory benefits like pensions, vacation days, health insurance, and more. Classify employment status correctly and provide legally compliant contracts outlining terms such as working hours, minimum wage, and termination policies.
Run payroll
After collecting necessary employee details and signing employment agreements, the EOR manages payroll processing. Mexican employees receive their salaries in Mexican pesos, with taxes withheld according to local laws. Employers must pay payroll taxes and contributions, including income tax, social security, and mandatory healthcare, by specified deadlines to avoid penalties.
The cost of EORÂ in Mexico
The cost of EOR in Mexico varies based on factors such as the number of employees, the complexity of local regulations, and the specific services required. As most other providers use intermediaries and we do not, at WTS Energy we can ensure competitive pricing that is tailored to your needs. Contact us for a customized quote.
Taxes and payroll
First off, taxes are levied in Mexico at both the federal and state levels. As you may presumably expect, state-level taxes differ depending on the state in which the firm is situated, but federal taxes are the same across Mexico.
In Mexico, employer payroll tax is a state-level tax that is rather simple. It is the employer’s responsibility to pay it, and it is calculated as a percentage of the total payroll. Depending on the state in where your firm is based, the rate might vary from 1% to 3% of the salary.
Employer taxes
Employer taxes in Mexico can range from 1% to 3% of the worker’s salary, depending on the state. It is important to note that it is the company’s responsibility to withhold taxes and pass them over to the SAT (Mexican tax authorities). We know this sounds like a big hassle and with our EOR services you can sit back and not worry about these and other logistics.
Payroll types
Companies in Mexico have access to many payroll options based on their specific demands and specifications. Among the most prevalent kinds are the following ones:
- Regular payroll is the monthly salary that employees receive in exchange for their labor over the course of a complete month. It covers the ideas of basic pay, perks, employer payments, and deductions.
- When additional payments, such as bonuses, awards, or compensation, are given to employees that are not covered by the usual payroll, this is known as an extraordinary payroll.
Payroll cycle
Salaries in Mexico are paid typically twice in a month, on the 15th and last day of the month. However, it is allowed to give your worker a salary once a month.
Minimum wages are classified into two categories: a “professional” minimum pay, which is applicable to specific employees based on their occupation, activity, or craft, and a general minimum salary that is applicable to all workers regardless of age, industry, or experience.
There are two categories under which the general minimum wage falls:
- Workers in the northern border communities of Mexico’s Free Zone, where living expenses are greater, earn MXN 374.89 per day.
- MXN 248. 93 daily throughout the remainder of the nation
Overtime: All employees in Mexico are entitled to overtime if they work past their regular working hours, regardless of the type of work they do. For the first nine hours of overtime, they are paid at their regular rate; beyond that, they are paid double their regular rate.
Paid-time off bonus: In Mexico, employers encourage their staff to take paid time off, and those who do so throughout the year are rewarded with a bonus (also known as prima).
If they take leave, the employees are entitled to at least 25% of their base pay. When the fiscal year concludes, the employer has the option of paying the whole amount or a portion of it each time the worker takes paid time off.
Aguinaldo: employees are entitled to this bonus which is given every year by December 20. This is separate from vacation pay and it is equivalent to 15 days of wages. Employees need to have at least one year of service to receive the aguinaldo.
Employee benefits for Expats
Like most nations, Mexico provides perks to entice foreign employees to work there. They are entitled to the predetermined number of leaves and benefits, such as meal cards and health insurance. Other benefits could be:
- Moving costs
- Transportation expenses
- Accommodation expenses
Period of probation
The period of probation given by an employee or provided by an employer depends on the type of contract the worker holds.
Terminating and giving notice
According to Mexican law, an employee may be fired for a number of reasons, such as mutual consent, the employer’s will in the event of bankruptcy or mercantile insolvency, or a physical or mental impairment that prevents the person from doing their job. Indemnity should be provided if the employee suffers a whole and permanent impairment as a result of the job risk.
While an employee is on probation, their employer is not liable for their termination. A worker has the right to file a case with the courts against a wrongful termination.
Severance
Employers are required to pay 90 days’ earnings to an employee who is fired without cause. In addition, there will be a seniority bonus of 12 days of pay for every year of service, capped at twice the rate of the minimum wage set by law, and 20 days of pay, regardless of the number of years of service.
How to handle terminations in Mexico with the use of an EOR
If you are terminating an employee in Mexico, you ought to manage the termination through an employer of record (EOR). This can entail abiding by regional labor laws and rules concerning the terms of termination, such as notice durations, severance compensation, and any other legally mandated criteria.
Mexico’s labor laws protect workers by ensuring fair compensation and regulating rest and vacation days. These laws aim to balance productivity with employee well-being.
Working hours
Mexico maximum working hours per week is 48 hours, depending on the shirt that corresponds to the following:
- Day: 48 hours per week
- Night: 42 hours per week
- Mixed: 45 hours per week
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Employees are not required to work on their rest or vacation days. If they do, the employer must pay either double the salary for rest days or additional compensation for vacation days.
Any work beyond 48 hours is paid as overtime. Overtime wages are 100% higher than regular wages. If overtime exceeds nine hours per week, wages increase to 200% higher than regular wages. In exceptional cases, the workday can extend by up to three hours, but no more than three times a week.
Leave and holidays
Annual leave: Depending on the length of employment, employees are entitled to yearly paid leave under Mexican federal labor legislation. The following is the minimum number of statutory yearly leave days:
After one year of service, six days of annual leave
After two years of service, eight days of annual leave
After three years of service, 10 days of annual leave
After four years of service, 12 days of annual leave
After the fourth year of service, an employee’s annual leave entitlement increases by two days for every four years of service
Employees are entitled to a vacation premium on top of their base pay. This premium, which is due throughout the course of the leave, is equal to 25% of their pay.
Sick leave: Workers in Mexico are entitled to up to four weeks of paid sick leave per year. Employees are entitled to sick leave after four days, during which they will get 60% of their regular pay rate, up to a maximum of 52 weeks. On the other hand, the Mexican Social Insurance Institute confirms the illness or injury on the part of the workers.
Maternity and paternity leave: In Mexico, maternity and paternity leave are covered by social security and public healthcare. Twelve weeks of maternity leave are available to expectant mothers. a six-week prenatal and postpartum leave that lasts for six weeks each. Fathers are entitled to five days of paid parental leave following the birth of their kid.
Bank holidays: In Mexico, there are seven or eight official national holidays. They are listed below:
- New Year’s Day (January 1)
- Constitution Day (February, the specific day fluctuates each year)
- Benito Juarez Day (March, the specific day fluctuates each year)
- Labor Day (May 1)
- Independence Day (September 16)
- Revolution Day (November, the specific day fluctuates each year)
- Christmas Day (December 25)
Employee rights
Mexican workers are widely protected from unfair termination, unfair wages and work conditions. All employees must have written contracts with their employers (a change made after oral contracts were stopped), and if they are terminated, or the company closes, they must also offer severance benefits. Employee rights under the FLL include the entitlement to a minimum wage as well as perks like paid time off and health insurance.
The labor code of Mexico prohibits discrimination in any form. Workers in Mexico are shielded from prejudice on the grounds of age, gender, handicap, sexual orientation, religion, social standing, and race. Both while they are employed by a company and during the hiring process, Mexican workers are legally protected.
Business Visa
For business activities up to 180 days, excluding paid work.
Temporary Resident Visa
For living and working in Mexico for over 180 days, up to four
Permanent Resident Visa
For those intending to live and work permanently, including individuals with close family ties or long-term residency in Mexico.
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The benefits of global EOR
WTS Energy stands out for its industry expertise and global reach. Our professionals have extensive experience in the energy sector, making us uniquely equipped to handle the specific challenges of hiring and managing a global workforce. We provide:Â
Compliance with Local Regulations
Stay on the right side of local laws with EOR services that ensure compliance with labor laws, tax codes, and employment regulations, minimizing legal risks in the energy sector.
Cost EfficiencyÂ
Cut costs and hassle with EOR services, which eliminate the need for local entities and free up resources for your core business activities.
Lightning-Fast Market Entry
Beat the competition by rapidly onboarding skilled professionals with EOR services, ensuring you meet project deadlines and secure contracts quickly.
Tap into Global Talent
Hire the best from around the world! EOR services give you access to a global pool of specialized professionals for your complex energy projects.
Focus on What Matters
Let EOR handle the nitty-gritty of employment management, so you can concentrate on strategic planning, project execution, and driving innovation.
Enhanced Flexibility
Adapt to project needs with ease. EOR services offer the flexibility to scale your workforce up or down without the hassle of permanent local hires.
Reduce Your Risks
EOR services help you navigate regulatory changes and geopolitical challenges, ensuring your workforce management is compliant and robust.
Simplify Payroll & Benefits
Streamline payroll and benefits management across multiple jurisdictions with EOR services, boosting operational efficiency and employee satisfaction.
Get Ongoing HR Backup
Beat the competition by rapidly onboarding skilled professionals with EOR services, ensuring you meet project deadlines and secure contracts quickly.
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How to get started, step-by-step
From our initial contact to a fully compliant legal entity in Mexico
No need to limit your growth
We can assure a compliant legal entity for your business to grow in the country of your choice.
Consultation and Needs Assesments
We begin with a detailed consultation to understand your specific needs in the energy sector, including project scopes and workforce requirements, then assess your staffing and regulatory needs, analyzing necessary skills and certifications.
Custom Solution DevelopmentÂ
We develop a tailored EOR solution, including payroll, tax compliance, and benefits administration.
Implementation
We manage the onboarding process, ensuring all legal and administrative requirements are met for seamless integration.Â
Ongoing Management
Our team provides continuous support, handling payroll, compliance, and HR issues, ensuring smooth operations.
Feedback and ImprovementÂ
We actively seek feedback to refine and enhance our services, ensuring the best possible experience for both employers and employees.Â
Recruitment to help you grow
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