Establishing and maintaining a Mexico payroll
Mexico is a huge, well-connected country with a low cost of living and a burgeoning economy, making it an exciting place to do business. Many foreign organizations choose to expand into the North American country, and it can be a very lucrative endeavor.
One important element of expanding into Mexico for many businesses will be the hiring of local staff, along with the associated payroll setup and management. This can often be a complex process, with long waiting times and delays regularly hindering expansion. There are also regional differences in employment law to take into account, which can complicate matters further.
Horizons offers a comprehensive Mexico payroll outsourcing service, designed to help organizations expand into Mexico seamlessly, even without a business entity registered in the country.
If you have an entity
If your business has already an official entity in Mexico, we can help you set up and run your in-country payroll, managing all of the associated HR, administration, and compliance work.
This solution is ideally suited to large organizations with a long-term outlook for expansion in Mexico.
If you don’t have an entity
If your business has not registered an official entity in the country, then you have the option of hiring through our Mexican subsidiary. We can act as employer of record in the country, set up and manage your payroll, and handle associated HR, administration, and compliance.
This solution provides a low-risk and flexible route of entry into the Mexican marketplace so you can get all the benefits of hiring locally without the hassle, and can focus on the important work of expanding your business.
Fast, reliable expansion into Mexico
Reliable Delivery
We guarantee that all payments will be on time, your data will be secure, and you can be up and running within just 48 hours.
Established Presence
Our in-country subsidiary will act as employer of record, offering you a presence in Mexico for legal local employment.
Flexible Solutions
Our team will manage all of the admin, payroll, HR, and taxes, so you can focus on building your business in Mexico.
Up-To-Date Compliance
We’ll ensure you stay fully compliant at all times with the laws laid out in Mexico’s employment regulations.
Single Point of Contact
Our centralized service gives you a single point of contact, simplifying the entire Mexico employment process.
Proven Worldwide Expertise
Our in-house teams of payroll and HR experts have already helped all kinds of organizations expand globally.
Mexico payroll guide
What are the withholdings and tax rules in Mexico?
Mexico’s progressive taxation system charges workers up to 35% of earnings, depending on income level. This sum is deducted from salaries before being paid to workers, then passed on to the government by employers.
Employees in Mexico contribute to special government-associated accounts called AFOREs, which help people save for retirement. Workers choose which type of account they want, and employers must add either 2% or 5% of salaries depending on the employee choices.
|
Sickness & Maternity
|
5.25% |
|
Disability & Death
|
1.75% |
|
Retirement
|
2.00% |
|
Layoff and Retirement Benefits
|
1.75% |
|
Child Care
|
1.00% |
|
Work Related Accidents (depends on the state)
|
0.50% – 3.00% |
|
Housing Tax
|
5.00% |
|
Payroll State Tax (depends on the state)
|
0.50% – 3.00% |
|
Total Employment Cost
|
up to 22.75% |
|
Sickness & Maternity
|
5.25% |
|
Disability & Death
|
1.75% |
|
Layoff and Retirement Benefits
|
3.15% |
|
Total Employee Cost
|
10.15% |
Up to 6,942.35 Pesos | 1.92% |
6,942.35 – 58,922.27 Pesos | 6.40% |
58,922.27 – 103,550.51 Pesos | 10.88% |
103,550.51 – 120,372.95 Pesos | 16.00% |
120,372.95 – 144,119.39 Pesos | 17.92% |
144,119.40 -290,667.83 Pesos | 21.36% |
290,667.83 – 458,132.39 Pesos | 23.52% |
458,132.39- 874,650.11 Pesos | 30.00% |
874,650.11 – 1,166,200.11 Pesos | 32.00% |
1,166,200.11 – 3,498,600.11 Pesos | 34.00% |
Over 3,498,600.11 Pesos | 35.00% |
Entitlements and terminations in Mexico
When employing staff in Mexico, you should always lay out the specific terms of entitlements and terminations in a formal contract of employment. These contracts should be written in Spanish, and use the local currency when referencing sums of money.
Mexican employees are entitled to various benefits, such as paid vacation days, maternity leave, and a guaranteed minimum wage. Some of these entitlements vary by region, for example, minimum wages are higher in the northern border states, so it is crucial that you fully understand both the national and regional legislation.
How to establish Mexico payroll outsourcing
An important part of the hiring and payroll process for many foreign organizations is setting up a Mexican entity to act as employer of record. This process can be lengthy and expensive, often taking weeks or even months to complete.
You can avoid the unnecessary hassle by outsourcing to the Horizons Mexico payroll outsourcing experts. Our team will handle everything for you, ensuring you are set up in days, not months. You can also choose to hire using our Mexican subsidiary as employer of record, helping you can focus on expanding your operations whether or not you already have a registered entity in Mexico.
Request a Proposal
Your one-stop solution for Mexico payroll outsourcing and expansion
Horizons’ Mexico payroll, PEO, and employer of record services enable your organization to get started in Mexico as quickly and reliably as possible. With our help, you could be trading in Mexico in as little as 48 hours, whether or not you have a legal entity in the country, and could save more than 80% in expansion costs.
Our Mexican payroll experts can also run your company’s payroll setup and management, along with benefits, expenses, HR, and tax compliance in the country. And as the only global PEO with an in-house recruitment team, we will find, hire, and onboard your local workforce for you.
