Employer of Record Guide in 

Mexico

Your EOR guide in Mexico

Start by identifying the Mexican legal employer and the actual service being supplied. Where one company makes its employees available to another, assess the arrangement under Articles 12–15 of the Federal Labor Law. For permitted specialized services, the provider needs the applicable registration and a written commercial contract identifying the service and approximate number of participating workers. Check the registered activities and current status in REPSE; registration must be renewed every three years.

The employee’s agreement with the employer is separate from your company’s service agreement with the provider. The latter should allocate funding, records, reporting, employment decisions and service-exit responsibilities. It cannot remove statutory worker rights or the recipient’s potential joint liability when the provider fails to meet relevant labor or social-security obligations. Labor rules, social-security rules.

Choose the employment route

The route depends on the facts of the work, not just team size or the length of the project. An indefinite employment relationship is the default; fixed terms need a lawful basis. Using an EOR does not by itself settle immigration, corporate-tax or permanent-establishment questions. Employment rules, tax framework.

Agree who does what

This is an operating checklist to agree in writing. Employer obligations remain governed by law; commercial allocation does not eliminate statutory liability. For specialized services, confirm responsibility for the required IMSS and INFONAVIT contract reporting as well as ordinary payroll contributions. Social Security Law, housing-fund law.

If you are ready to choose a provider, see our Mexico EOR comparison. The sections below explain the employment requirements to bring into that discussion.

Pay & Tax

Minimum Wage

Mexico’s daily minimum wages from January 1, 2026 are:

The border rate applies to the designated municipalities. Mexico also sets minimum wages for 61 listed professions and trades. Check the applicable role and location before setting pay; a daily statutory minimum is not a market-salary benchmark. 2026 wage announcement

Payroll Cycle

Pay intervals cannot exceed one week for employees performing material work and 15 days for other employees. The written employment terms should state the amount, place and date of payment. Agree the provider’s funding and variable-pay cutoffs early enough to meet the employee’s pay date. Labor rules

Individual Income Tax

The legal employer withholds income tax using the applicable payment-period table. The 2026 schedule has marginal rates from 1.92% to 35%; this is not a flat deduction from every salary. Income tax withheld from the employee is distinct from employer-paid costs. Net pay can change with taxable benefits, residence and other relevant circumstances. SAT’s 2026 tables

Tax Residency Criteria

Mexican domestic tax residence is not determined by a blanket 183-day test. A home in Mexico is central to the rule; where the individual also has a home elsewhere, the center of vital interests matters. The law includes whether more than 50% of annual income is Mexican-source or the main professional activities are in Mexico. A treaty may affect dual residence. Resolve this before promising net pay or arranging cross-border payroll. Federal Fiscal Code

Employer Payroll Contributions

A Mexico EOR budget needs separate salary, statutory, contractual and service-fee lines. There is no single employer-contribution percentage that works for every hire.

Contribution bases, thresholds and caps differ by branch, and not every employment cost is capped. Confirm the registered contribution salary, employer risk rate and applicable state payroll tax with payroll. Employee income tax and employee-side social-security deductions reduce net pay; do not add them again as employer costs. Social Security Law, INFONAVIT obligations.

Ask how annual payments are accrued and how statutory benefits are integrated into the contribution salary. Ordinary salary paid during vacation is already salary; the vacation premium is an additional payment. Profit sharing follows the legal employer’s taxable result and statutory rules, rather than a flat percentage of the employee’s salary.

For contribution calculations and salary scenarios, use our Mexico hiring-cost guide. Its Mexico City examples are scoped statutory floors with exclusions, so add the actual risk rate, applicable PTU, benefits, operating costs and EOR fee for your arrangement.

Working Hours

The transitional maximum workweek remains 48 hours in 2026. The May 2026 reform reduces it to 46 in 2027, 44 in 2028, 42 in 2029 and 40 in 2030 without reducing salary or benefits. Daily limits remain eight hours for a day shift, seven for a night shift and seven and a half for a mixed shift. At least one paid rest day follows six days of work. Agree a compliant schedule and plan for the annual reductions. Current labor law

Overtime Pay

For 2026, the transitional weekly overtime limit is nine hours. Overtime within the applicable limit is paid at twice the ordinary hourly rate; time beyond it attracts triple pay and further legal limits. The combined ordinary and extraordinary day cannot exceed 12 hours. Authorize and record overtime rather than using it routinely to extend the schedule. An ordinary Sunday shift also attracts a premium of at least 25%. Labor rules

Bonus Payments

Employees receive an annual aguinaldo of at least 15 days of salary, payable before December 20, with a proportional amount for an incomplete year.

PTU profit sharing is separate. The employee pool is generally 10% of the legal employer’s relevant taxable profit, subject to exemptions and distribution rules. An individual’s statutory cap is the greater of three months of salary or the average PTU received during the preceding three years. Confirm eligibility, the employer’s result and the payment process; do not treat PTU as guaranteed salary or a universal salary percentage. Labor rules, SAT’s PTU guidance.

Full-Time vs. Part-Time

Paid personal work under another party’s direction can constitute employment regardless of the label. A shorter schedule does not create a category without statutory benefits. Record hours and pay clearly and apply proportional calculations only where permitted. Fixed-term employment needs a statutory justification, such as genuinely temporary work or replacing another employee. Employment rules

Leave Policy

Vacation Leave

The minimum entitlement after the first completed year is 12 paid working days. It rises to 14, 16, 18 and 20 days in years two through five, then increases by two days for each further five-year service block: 22 days for years six to ten, for example. Grant leave within six months after the anniversary. Employees may choose how to distribute the minimum continuous entitlement, and the vacation premium is at least 25%. Vacation ordinarily cannot be replaced with cash while employment continues. Vacation rules

Sick Leave

For certified ordinary illness, eligible insured employees receive an IMSS subsidy from day four, generally at 60% of the registered contribution salary. Contribution-history and certification requirements apply. The first three days do not have a general IMSS subsidy; check whether a contract, collective agreement or employer policy adds pay. Occupational injuries have a separate regime. Social Security Law

Maternity Leave

The ordinary entitlement is six weeks before and six weeks after birth. Up to four prenatal weeks can transfer after birth with the required medical authorization and statutory conditions. IMSS ordinarily pays eligible employees 100% of the last daily contribution salary for the 84-day period. Eligibility includes 30 weekly contributions in the preceding 12 months, IMSS certification and no paid work during the subsidy period. If the contribution test is unmet, the law places the full-salary obligation on the employer. Check eligibility before leave starts. Labor rights, subsidy rules.

Paternity Leave

The employer provides five paid working days for the birth or adoption of a child. Document the event and coordinate the dates and payroll treatment. Labor rules

Other Statutory Leave

A mother adopting a child receives six paid weeks after placement. Breastfeeding rights include two additional daily 30-minute breaks, or an agreed one-hour reduction where the statutory conditions apply, for up to six months. Employers also allow necessary time for voting and compulsory public duties when they fall within working hours. General paid bereavement or marriage leave is not established by the Federal Labor Law; check contractual and collective terms. Labor rules

Summary

Termination

Termination Types

Ending your commercial EOR agreement or an assignment does not automatically end the employee’s employment. Coordinate resignation, mutual agreement, a lawful temporary contract’s expiry, dismissal or another statutory ground with the legal employer before acting. A cause-based dismissal must satisfy Article 47 and its notice procedure. Labor rules

Notice Period Requirements

Mexico has no general statutory advance-notice period for ordinary resignation or dismissal. A cause-based dismissal nevertheless requires written notice identifying the conduct and dates, delivered to the employee at dismissal or referred to the competent tribunal within five business days. Missing notice creates a presumption of unjustified separation, subject to the law’s proof rules. Check any additional contractual or collective notice promise. Article 47

Severance Pay

An unjustifiably dismissed employee may generally seek reinstatement or three months of salary, plus accrued benefits and applicable additional amounts. Litigation can produce back pay up to 12 months and statutory interest thereafter. Twenty days per year is not an automatic addition in every dismissal; specified statutory situations control it. A seniority premium of 12 days per year can also apply, with salary-cap and eligibility rules. Obtain a case-specific calculation before issuing a separation proposal. Labor remedies

Resignation

Final settlement normally covers unpaid wages and proportional accrued aguinaldo, vacation and vacation premium. Earned PTU follows the normal rules. The seniority premium on voluntary resignation generally requires at least 15 years of service. A forced resignation can be treated as dismissal. Labor rules

Final Pay Requirements

The legal employer should document wages, accrued benefits, variable pay, PTU when due and any dismissal compensation. Confirm the salary bases, tax treatment and required settlement process. Statutory accrued rights cannot be waived. Coordinate equipment return and access removal with the process, while keeping the employment settlement separate from the client’s service-account closure. Labor rules

Statutory Time Off

National Holidays

The mandatory federal rest dates falling in 2026 are:

The six-year October 1 presidential-transfer holiday does not fall in 2026. Ordinary election days designated by applicable electoral law may also be mandatory. Holy Thursday and Good Friday are not general mandatory federal rest days under Article 74. Holiday rules

Holiday Pay Rules

An employee working a mandatory rest day receives ordinary rest-day pay plus double salary for the work, totaling three times ordinary daily pay. Calculate any applicable Sunday premium separately. Keep the schedule and payroll records. Article 75

Regional Variations

Check local election rules and the applicable employment or collective agreement. A customary closure or public-sector holiday does not automatically create a mandatory private-sector holiday. Contractual benefits can add paid days beyond the federal floor. Labor rules

Onboarding

Required Documents for Employment

Prepare the employee’s identity and address details, CURP, RFC, IMSS social-security number, bank details and any required immigration permission. Collect role-specific licences or other evidence only where relevant. The written employment terms should identify the parties, duties, workplace, schedule, pay, payment date, duration, training, rest, vacation and statutory beneficiaries. Document any valid probation, confidentiality, equipment and telework terms. Contract requirements

Work Authorization

An EOR agreement does not grant immigration permission. Confirm that a foreign national’s status permits the proposed paid activity before work starts. The job-offer visa route requires an employer registration certificate and supporting offer documents; consular and residence steps have their own dependencies. Check statutory nationality requirements and role-specific licensing too. INM requirements, employment framework.

Background Checks

Use checks relevant and proportionate to the role. Explain what information is collected, its purpose and recipients, and the candidate’s rights. Assess sensitive, financial and criminal-history data carefully; consent does not remove purpose, proportionality or security obligations. Do not describe a routine provider practice as a universal legal requirement. Privacy law

Data Protection & Privacy

Provide the applicable privacy notice when collecting employee information, limit data to lawful purposes, secure it and support access, correction, cancellation and opposition rights. Document instructions and safeguards with payroll, EOR and screening processors. Domestic and international transfers must satisfy the applicable notice, consent and exception rules. Private-sector privacy law

Probationary Periods

For an indefinite relationship or one exceeding 180 days, written probation can generally last up to 30 days. Certain management and specialized technical or professional roles can qualify for up to 180 days. Salary, social security and benefits apply during probation. It cannot be extended or repeated, and ending employment requires the statutory assessment process; a probation clause is not an unrestricted dismissal right. Probation rules

Onboarding Timeline

The IMSS filing window for employee registration and relevant movements is no more than five business days. Prepare coverage and records before or at start rather than treating that window as permission to delay readiness. Immigration or document corrections can change the sequence; use confirmed dependencies rather than a universal onboarding promise. Social Security Law

Other

Worker Classification

Paid personal work under another party’s direction is the core employment test. A contractor agreement, invoice or foreign governing-law clause does not settle classification. Assess the real relationship and keep this analysis separate from the subcontracting rules governing a provider that makes workers available to a recipient. Articles 20–21

Union Relations

Check whether a collective agreement applies before setting terms. It can improve statutory benefits and affect schedules, leave and employment procedures. Employees have organizing and collective-bargaining rights; union coverage is not confined to manufacturing. Collective rights

Workplace Policies and Equal Treatment

Agree written policies for nondiscrimination, harassment, safety, working time, complaints and confidentiality. Apply them consistently to the actual workplace and role, with lawful contractual and collective differences. Employer obligations

Remote Work Framework

Mexico’s telework regime covers work performed at home or another employee-chosen location for more than 40% of working time; occasional or sporadic remote work is excluded. Qualifying arrangements require written terms and employer duties covering equipment, proportional telecommunications and electricity costs, security, social insurance and the right to disconnect. Agree workplace changes, supervision and reversibility, and implement the safety requirements of NOM-037. Telework law

Specialized Services and EOR Fit

For a specialized-service arrangement, compare the actual activity with the recipient’s corporate purpose and predominant economic activity. Verify the provider’s registered activity and current REPSE status, the written service scope and applicable reporting. Core-activity personnel provision cannot be made lawful merely by changing a contract title. The recipient may retain joint labor and social-security liability if the provider fails its obligations. Labor law, social-security law.

Before Using an EOR

Confirm the legal employer, proposed service structure, any required registrations and the allocation of employment decisions. Ask for an itemized quote and the process for payroll changes, leave, telework expenses, record access and ending the service or employment.

Borderless AI’s EOR service supports employment agreements, onboarding, payroll, benefits and compliance administration. For Mexico, bring the actual role and operating facts so the team can assess the available arrangement and confirm the country-specific scope. Book a discussion with the job description, company activities, work location, compensation and target start date.