Written and fact-checked by the EORquotes research team · Data verified July 2026
Hiring an employee in Mexico costs significantly more than their gross salary. This calculator itemizes every mandatory employer contribution so you can budget an offer accurately — before you talk to an EOR provider.
How much does it cost to hire an employee in Mexico? Employing someone in Mexico costs roughly 24.69% above their gross salary in mandatory employer contributions. A 35,000 MXN per month hire costs about 43,642 MXN per month all-in — 523,698 MXN per year across 12 salary payments.
Cost of hiring in Mexico: key facts (2026)
- Employer contributions add about 24.69% on top of gross salary at a typical wage — a 35,000 MXN/month hire costs roughly 43,642 MXN per month all-in.
- Salary is paid 12 times a year.
- There is no single statutory minimum wage in Mexico; pay floors come from collective agreements or regional wage boards.
- Several contributions are capped or salary-dependent, so the effective rate falls as salary rises — the calculator handles this.
- Statutory paid leave is 12 days plus 8 public holidays, on a 48-hour week.
Hiring in Mexico in 2026: what to know
Mexico has become the primary nearshoring destination for US companies: full time-zone alignment, a large bilingual and manufacturing-and-services workforce, and the practical advantages of the USMCA trade relationship. Monterrey, Guadalajara and Mexico City anchor strong engineering, finance and customer-support talent at costs well below the US.
The payroll structure is intricate. Employer social-security cost is spread across many IMSS branches, some computed on a capped base measured in UMA, one (cesantía y vejez) now rising progressively with salary under the 2020 pension reform, plus a state payroll tax that varies by location. Getting to a real loaded cost — rather than a headline salary — takes care, which is exactly what an EOR handles.
For 2026 the employer’s cesantía-y-vejez contribution continues its reform-driven climb, now ranging from 3.15% to 7.513% by salary on the way to 11.875% in 2030 — the single moving piece in Mexican employer cost. The 2023 ‘vacaciones dignas’ reform also stands, raising statutory first-year vacation to 12 days. The contribution ceiling tracks the 2026 UMA of 117.31 MXN per day (25 UMA ≈ 89,000 MXN per month).
This page focuses on what a hire costs. For the full employment picture — contract types, probation, benefits, termination — see our Mexico EOR country guide.
Calculate the true cost of an employee in Mexico
How this calculator works: contributions are computed on the annual gross salary
(12 payments per year), contributions with a statutory ceiling stop at that ceiling, rate ranges use the midpoint, and every rate is cited
in the sources at the bottom of this page.
What a hire in Mexico actually costs: worked examples
Example: a typical professional hire (35,000 MXN/month)
Employing a typical professional hire (35,000 MXN/month) in Mexico costs 523,698 MXN per year — an effective 43,642 MXN per calendar month, about 25% more than the monthly gross written in the contract.
| Annual gross (12 payments) | 420,000 MXN |
| IMSS — sickness & maternity (employer share) (2.4%), capped at 89,156 MXN/month | 10,080 MXN |
| IMSS — disability & life (invalidez y vida) (1.75%), capped at 89,156 MXN/month | 7,350 MXN |
| IMSS — daycare & social benefits (guarderías) (1.0%), capped at 89,156 MXN/month | 4,200 MXN |
| IMSS — work-risk insurance (riesgos de trabajo) (0.54%), capped at 89,156 MXN/month | 2,268 MXN |
| IMSS — retirement (SAR / Retiro) (2.0%), capped at 89,156 MXN/month | 8,400 MXN |
| IMSS — severance & old age (cesantía y vejez) (4.0%), capped at 89,156 MXN/month | 16,800 MXN |
| INFONAVIT (housing fund) (5.0%), capped at 89,156 MXN/month | 21,000 MXN |
| State payroll tax (Impuesto sobre Nómina) (3.0%) | 12,600 MXN |
| Aguinaldo + vacation premium provision (5.0%) | 21,000 MXN |
| Total annual employer cost | 523,698 MXN |
| Effective monthly cost | 43,642 MXN |
Example: a senior hire (52,000 MXN/month)
Employing a senior hire (52,000 MXN/month) in Mexico costs 778,066 MXN per year — an effective 64,839 MXN per calendar month, about 25% more than the monthly gross written in the contract.
| Annual gross (12 payments) | 624,000 MXN |
| IMSS — sickness & maternity (employer share) (2.4%), capped at 89,156 MXN/month | 14,976 MXN |
| IMSS — disability & life (invalidez y vida) (1.75%), capped at 89,156 MXN/month | 10,920 MXN |
| IMSS — daycare & social benefits (guarderías) (1.0%), capped at 89,156 MXN/month | 6,240 MXN |
| IMSS — work-risk insurance (riesgos de trabajo) (0.54%), capped at 89,156 MXN/month | 3,370 MXN |
| IMSS — retirement (SAR / Retiro) (2.0%), capped at 89,156 MXN/month | 12,480 MXN |
| IMSS — severance & old age (cesantía y vejez) (4.0%), capped at 89,156 MXN/month | 24,960 MXN |
| INFONAVIT (housing fund) (5.0%), capped at 89,156 MXN/month | 31,200 MXN |
| State payroll tax (Impuesto sobre Nómina) (3.0%) | 18,720 MXN |
| Aguinaldo + vacation premium provision (5.0%) | 31,200 MXN |
| Total annual employer cost | 778,066 MXN |
| Effective monthly cost | 64,839 MXN |
Where the money goes
At a typical 35,000 MXN/month salary, this is how the annual cost of employing someone in Mexico divides between take-home pay and the mandatory contributions on top:
- Annual gross (12 payments) — 420,000 MXN (80.2%)
- IMSS — sickness & maternity (employer share) (2.4%), capped at 89,156 MXN/month — 10,080 MXN (1.9%)
- IMSS — disability & life (invalidez y vida) (1.75%), capped at 89,156 MXN/month — 7,350 MXN (1.4%)
- IMSS — daycare & social benefits (guarderías) (1.0%), capped at 89,156 MXN/month — 4,200 MXN (0.8%)
- IMSS — work-risk insurance (riesgos de trabajo) (0.54%), capped at 89,156 MXN/month — 2,268 MXN (0.4%)
- IMSS — retirement (SAR / Retiro) (2.0%), capped at 89,156 MXN/month — 8,400 MXN (1.6%)
- IMSS — severance & old age (cesantía y vejez) (4.0%), capped at 89,156 MXN/month — 16,800 MXN (3.2%)
- INFONAVIT (housing fund) (5.0%), capped at 89,156 MXN/month — 21,000 MXN (4.0%)
- State payroll tax (Impuesto sobre Nómina) (3.0%) — 12,600 MXN (2.4%)
- Aguinaldo + vacation premium provision (5.0%) — 21,000 MXN (4.0%)
Skip the paperwork. An EOR employs your Mexico hire through its own local entity — payroll, contributions, insurance and compliance handled for a flat monthly fee. Most teams are up and running in days:
What’s behind each employer cost in Mexico
IMSS — sickness & maternity (employer share)
The employer’s sickness-and-maternity contribution combines several pieces: a fixed daily quota of 20.4% of the UMA (about 730 MXN per month regardless of salary), a 1.10% surcharge on the part of the salary above three UMA, 0.70% for cash benefits and 1.05% for pensioners’ medical care. The ~2.4% shown is the effective rate for a typical mid-level salary; because part of it is a fixed amount, the effective percentage is higher for low earners and lower for high earners.
IMSS — disability & life (invalidez y vida)
Employer contribution of 1.75% of the base salary of contribution (SBC) toward disability and life insurance, capped at a base of 25 UMA.
IMSS — daycare & social benefits (guarderías)
A 1% employer contribution funding the IMSS network of childcare centres (guarderías) and social-welfare services available to insured workers and their families. It is charged on the base salary of contribution up to the same 25-UMA ceiling as the other IMSS branches, so it caps out for higher earners.
IMSS — work-risk insurance (riesgos de trabajo)
Occupational-risk insurance, rated by the company’s accident history and risk class. The 0.54% shown is the minimum (Class I), typical of office and remote roles; hazardous industries pay substantially more.
IMSS — retirement (SAR / Retiro)
A flat 2% employer contribution paid into the worker’s individual retirement account (SAR), managed by their chosen AFORE pension fund. It sits alongside the cesantía-y-vejez branch and is calculated on the base salary of contribution up to the 25-UMA ceiling, so it too stops growing for high earners.
IMSS — severance & old age (cesantía y vejez)
Under the 2020 pension reform the employer’s cesantía-y-vejez contribution is progressive by salary, running from 3.15% to 7.513% in 2026 and rising each year toward 11.875% by 2030. The 4.0% shown is representative of a typical mid-level salary; higher salaries carry a higher rate.
INFONAVIT (housing fund)
A 5% employer contribution to the national housing fund, reported alongside IMSS and calculated on the SBC up to the 25-UMA ceiling.
State payroll tax (Impuesto sobre Nómina)
A state-level payroll tax on total wages, ranging from about 1% to 3% depending on the state (3% in Mexico City and several others). Unlike the IMSS charges it has no UMA ceiling — it applies to the full payroll.
Aguinaldo + vacation premium provision
Mexico mandates an aguinaldo (Christmas bonus) of at least 15 days’ pay by 20 December, plus a 25% vacation premium on statutory leave. Employers provision for these monthly, adding roughly 5% to the cost of every hire.
Salary structure in Mexico
Salary is paid 12 times a year. The mandatory aguinaldo (minimum 15 days) and the vacation premium are modelled above as a monthly provision rather than as an extra salary payment. Because several IMSS branches are computed on a capped base and one is salary-progressive, the effective employer percentage is an estimate for a typical salary — request a quote for an exact figure at your salary level. In practice: a 2,000 MXN monthly salary in Mexico means 24,000 MXN in annual gross pay (12 × 2,000), and every employer contribution above is calculated on that annual figure — which is why the calculator works on an annual basis before showing you the effective monthly cost.
EOR vs opening your own entity in Mexico
Setting up a Mexican entity means incorporation before a notary, RFC registration with the SAT, and enrolment with IMSS and INFONAVIT, followed by monthly SUA/IDSE filings — a multi-month project with specialist local accounting. An EOR removes it: the provider’s Mexican entity employs your hire, computes the per-branch IMSS cuotas and the progressive cesantía rate correctly, pays the state ISN and manages aguinaldo and the vacation premium. For nearshore teams and first hires, an EOR is the standard route in. Providers such as Deel and Remote are the usual starting points — or compare quotes from several at once.
Key employment facts for Mexico
Beyond the payroll numbers, these statutory rules shape what a Mexico hire costs and how the relationship works day to day:
| Working hours | 48 hours/week |
| Paid annual leave | 12 days |
| Public holidays | 8 |
| Maximum probation | 6 months |
| Notice period | No statutory notice period; unjustified dismissal instead triggers mandatory severance |
| Severance | Three months’ salary plus 20 days per year of service and a seniority premium (12 days’ pay per year, capped) for unjustified dismissal |
Hire in Mexico without an entity
We match you with vetted EOR providers for Mexico — free, in one request:
Or go direct to a provider covering Mexico:
Frequently asked questions
How much does it cost to employ someone in Mexico?
On top of gross salary, employers in Mexico pay roughly 24.69% in mandatory contributions at a typical salary. Several of those contributions stop at a statutory wage ceiling, so the effective percentage falls as salary rises — which is why a flat percentage of gross overstates the cost of senior hires here. Use the calculator above for an itemized total at your exact salary level.
What payroll taxes do employers pay in Mexico?
IMSS — sickness & maternity (employer share) (2.4%), capped at 89,156 MXN/month. IMSS — disability & life (invalidez y vida) (1.75%), capped at 89,156 MXN/month. IMSS — daycare & social benefits (guarderías) (1.0%), capped at 89,156 MXN/month. IMSS — work-risk insurance (riesgos de trabajo) (0.54%), capped at 89,156 MXN/month. IMSS — retirement (SAR / Retiro) (2.0%), capped at 89,156 MXN/month. IMSS — severance & old age (cesantía y vejez) (4.0%), capped at 89,156 MXN/month. INFONAVIT (housing fund) (5.0%), capped at 89,156 MXN/month. State payroll tax (Impuesto sobre Nómina) (3.0%). Aguinaldo + vacation premium provision (5.0%). The biggest single item is INFONAVIT (housing fund) at 5.0% — see the plain-language breakdown of each contribution earlier on this page for what it funds and who pays what.
How many salary payments per year are required in Mexico?
12. Salary is paid 12 times a year. The mandatory aguinaldo (minimum 15 days) and the vacation premium are modelled above as a monthly provision rather than as an extra salary payment. Because several IMSS branches are computed on a capped base and one is salary-progressive, the effective employer percentage is an estimate for a typical salary — request a quote for an exact figure at your salary level. When budgeting, multiply the monthly salary by 12, not 12: a 2,000 MXN contract is 24,000 MXN a year in gross pay before any employer contributions.
What is the minimum wage in Mexico?
There is no statutory national minimum wage in Mexico. Pay floors are set through collective agreements negotiated per industry, so the applicable minimum depends on the agreement covering your hire’s role — one more reason to work with a provider that knows the local agreements well.
Can I hire in Mexico without opening a local company?
Yes — that is exactly what an Employer of Record does. The EOR already operates a legal entity in Mexico: it employs your hire on your behalf, runs compliant payroll including the full ~24.69% of employer contributions, and sends you one monthly invoice. You direct the day-to-day work; the EOR carries the legal employment relationship.
How fast can I hire in Mexico through an EOR?
Typically days rather than months. The slow parts of employing in Mexico — entity setup, social-security and tax registrations, mandatory insurances — already exist on the EOR’s side. In practice your timeline is usually the candidate’s own notice period with their current employer (notice periods in Mexico run No statutory notice period; unjustified dismissal instead triggers mandatory severance).
What does an EOR service cost in Mexico?
Providers charge a flat monthly fee per employee on top of the statutory employment costs shown in the calculator above — the statutory costs are the same whoever you pick, but the fee is not. The same Mexico hire can be priced very differently across providers, which is why comparing several quotes at once pays for itself.
What is the notice period and probation limit in Mexico?
Probation runs up to 6 months, and statutory notice is No statutory notice period; unjustified dismissal instead triggers mandatory severance. Getting these right in the contract from day one matters — an EOR applies the correct local terms automatically, which is where compliance risk usually hides.
How is severance calculated in Mexico?
Three months’ salary plus 20 days per year of service and a seniority premium (12 days’ pay per year, capped) for unjustified dismissal. Because severance exposure grows with tenure, it is worth understanding before you make an offer — the calculator above covers ongoing cost, while severance is a separate end-of-employment liability.
How many paid leave days are mandatory in Mexico?
Employees are entitled to 12 days of paid annual leave plus 8 public holidays, on a 48-hour working week. Paid leave is part of the true cost of a hire even though it does not show as a payroll contribution.
Is Mexico a cost-effective place to hire compared with neighbours?
It depends on the role, but the honest comparison is total employer cost, not gross salary — the effective on-cost here is about 24.69%. Use the calculator for your exact salary, then compare against nearby markets from the country index linked below before you commit to a location.
Compare Mexico with other markets
Employer costs swing widely between countries — the same salary can cost far more or less depending on where you hire. See the full employee-cost calculator index for every country, or jump to a neighbour:
Compare EOR providers for Mexico
Knowing the cost is half the decision — the other half is which provider handles your Mexico hires best. These head-to-heads weigh entity model, strengths and pricing approach specifically for Mexico:
- Mexico: Deel vs Multiplier compared
- Multiplier vs Playroll for hiring in Mexico
- compare Deel and Remote in Mexico
- Remote or Oyster for a Mexico hire?
More Mexico resources
Costs are only part of the picture. Our Mexico EOR country guide covers contract types, benefits, termination rules and compliance for Mexico in depth — the questions that come up after the budget is approved.
Sources
Every number on this page traces to an official or authoritative source, checked on the date shown. Spot something outdated? Tell us and we will verify and correct it.
- IMSS employer branches (enfermedad y maternidad, invalidez y vida, guarderías, riesgos, retiro) on SBC capped at 25 UMA; 2026 UMA 117.31 MXN/day: IMSS (Instituto Mexicano del Seguro Social) (accessed 2026-07)
- Cesantía y vejez employer rate progressive 3.15%–7.513% in 2026 (2020 pension reform, to 11.875% by 2030): CONSAR / IMSS (reforma de pensiones 2020) (accessed 2026-07)
- INFONAVIT employer contribution 5% of SBC, capped at 25 UMA: INFONAVIT (accessed 2026-07)
- State payroll tax (Impuesto sobre Nómina) ~1–3% by state; 3% in Mexico City: Secretaría de Finanzas (example: Mexico City) (accessed 2026-07)
- Aguinaldo minimum 15 days (by 20 Dec) and 25% vacation premium; 12 days first-year leave (2023 reform): STPS (Ley Federal del Trabajo) (accessed 2026-07)
- Typical professional monthly salary reference (~35,000 MXN) used for worked examples: Editorial estimate for a mid-level professional hire; verify per role (INEGI data) (accessed 2026-07)