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SALARY PAYMENT IN Mexican Peso (MXN, $)
CONTRACT LANGUAGES Spanish / English
PAYROLL TAX 36.69% – 43.72%
PAYROLL CYCLE Bi-weekly
TIME TO HIRE 12 hours
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Mexico
Mexico is Latin America’s — and one of the world’s — strongest economies. Mexico has a well-educated and highly-skilled workforce.
It is a prime location for hiring overseas staff, but in doing so it is crucial to follow Mexican labor laws and employment ettiquette.
In this guide we set out everything you need to know about hiring employees in Mexico.
Population 130.3M (Labor Force 57.3 million) | Capital City Mexico City | Languages Spoken Spanish |
Currency Mexican Peso | GDP per capita 10.045,68 USD (2021) | Ease of Doing Business 60th in the world |
Minimum Wage 172 Pesos per day in 2022 (8-9 USD per day) | Average Wage 485 Pesos per day in 2022 (24-25 USD per day) | Paid Leave 6-10 days (7 national holidays) |
In 2020 GDP decreased by 8.2% in Mexico due to the pandemic slowdowns. By 2021, GDP increased by 4.8% and recovered well after the pandemic ridden economy. In 2022, the Mexican economy is projected to expand by 1.9%, which is not a bad figure considering the global economic outlook in 2022.
Regardless, Mexico is the 15th largest economy in the world. Mexico has a workforce that is very valuable. The country boasts of well-educated employees and relatively low average wages. Mexico could be the perfect destination for you to expand your business, considering these facts, and Horizons can offer you comprehensive employment solutions for expanding a business or starting a new business in Mexico.
Business regulation for employing candidates can be strict in Mexico. There are labor laws in Mexico surrounding things like minimum wage, overtime pay, discrimination, terminations, medical leave, and paid holiday leave. Navigating this can be complex, and therefore it is recommended to seek help from global PEO experts at Horizons to ensure you are in compliance with Mexican government labor laws when hiring candidates.
In Mexico there will be some similarities between the American and European workplace. However, there are some key elements to consider.
Business relationships in Mexico are built on mutual trust between employee and employer. It is common in Mexico to chat about personal and non-work/business matters before discussing specific tasks on hand. This is important to keep in mind during an interview process with a candidate.
In addition, it is important to be on time for meetings. However, it is common for meetings in Mexico to extend longer than they are planned for, and sometimes conversations about things that are not on the agenda will arise.
As in most countries, when recruiting employees, you have the option to set up a new local legal entity in Mexico, or to engage with a global PEO (professional employer organization) to hire and act as the EOR (employer of record) for your workforce. By engaging a global PEO, like Horizons, the employees still work solely for your enterprise, but the global PEO takes care of recruitment and all employment compliance obligations.
In Mexico interviews can sometimes be less formal than in North America and some European countries. This means that personal conversations are expected. Business relationships in Mexico are built on trust, therefore most interviews are preferably held in person, rather than online. After the COVID-19 pandemic, more interviews are being conducted online, however, when possible, you should conduct interviews in person in Mexico to keep up with business practice standards.
Yes, you can ask for a candidate’s previous salary, however they do not legally need to disclose that information to you. As in most countries, generally asking a candidate’s previous salary is not recommended and can be considered a bad interviewing practice.
In Mexico, employees get an increase in their salary every 18 months. Depending on industry and the employee’s experience level this figure can vary, however, on average the salary increase every 18 months is typically around 8%.
Onboarding employees in Mexico can become very complex. Mexico is known to have more strict labor laws than its North American counterparts. Wages are low, however there are many collective bargaining and trade unions throughout Mexico that can make for a complex onboarding process.
It is recommended to hire a global PEO, like Horizons, to help recruit, employ, onboard, and pay your employees. Consult with us and see how we can personally tailor your employment expansion to your business needs. Horizons will make sure your onboarding process is within compliance with Mexican government regulations.
In Mexico, remote working software like Microsoft Office, GoTo Meeting, and Monday.com are all widely used. Many educated individuals in Mexico are familiar with these online remote working tools and are likely able to adapt to the online tools your business uses.
| Date | Holiday name |
|---|---|
| 01 Jan., 2023 | New Year’s Day |
| 02 Feb., 2023 | Constitution Day |
| 15 Mar., 2023 | Benito Juarez Day |
| 01 May, 2023 | International Labor Day |
| 16 Sep., 2023 | Independence Day |
| 3rd Monday in November | Revolution Day |
| Additional holiday that comes every six years | Presidential Inauguration Day |
| 25 Dec.2023 | Christmas Day |
Salary increases are expected every 18 months in Mexico. Salary increase is dependent on how many years the employee has been with you, their level of position in the business (i.e., junior, mid-level, senior-level), the industry, and their performance. With these factors in mind, typically salary increase is around 8% every 18 months.
Hiring freelancers in Mexico can keep wage costs low. It is quite affordable, and it is estimated a freelancer will cost nearly 50% less than a full-time employee in Mexico. With that said, freelancers are independent contractors. This means they will have other clients and they may not prioritize your work over other clients’ work.
Hiring employees in Mexico also requires you to comply with many labor laws, like sick leave, termination, severance, and holiday paid leave. These are things you won’t need to include when hiring freelancers in Mexico. Whether hiring freelancers or employees, Horizons is here to help you make the right, legal, and proper employment choices for your business’ expansion to Mexico.
Yes, you can. The process of obtaining work permits for Mexico can be complex, and it’s necessary that you get it right if you want to avoid obstacles and delays to your expansion. At Horizons, our global expansion team offers extensive work visa support services, immigrations advice, and customized outsourcing. This will give your business everything necessary to quickly and compliantly kickstart your expansion into Mexico. If your expansion or start-up includes hiring foreign workers in Mexico, Horizons can help navigate that as well.
Whether you are expanding into Mexico or starting up, it is crucial to understand which situation is best for you. Opening a subsidiary in Mexico can be complex. A PEO like Horizons offers any foreign company with intentions to expand globally with the convenience of turning into its subsidiary in Mexico, instead of going through the rigorous process and legal challenge of forming a legal entity in Mexico. Horizons can take care of hiring, outboarding, and paying your employees in Mexico to make for your expansion into Mexico to run smoothly.
Hiring employees in Mexico can be complex and involve making detailed employment contracts, adhering to all labor laws, and understanding fully the business culture. A global PEO, like Horizons, can help with all your employment needs for an expansion or start in Mexico. Horizons can help you recruit, hire, and pay your employees quickly and compliantly and offer expert guidance throughout.
Your business can easily hire employees in Mexico without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
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Singapore 068895
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Headquarters – Singapore
71 Robinson Road #13-153
Singapore 068895
+65 3105 1170
Skalitzer Str. 85/86
10997, Berlin
+49 30 3119 9653
1700 S. Lamar Blvd Suite 338
Austin, Texas 78704
+1 (737) 265-6065
See more locations
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