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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 boasts a stable, growing, and diverse economy: It benefits from a 40 free trade agreements with other nations, including the United States, Mexico, Canada Agreement (USMCA — the updated version of the North America Free Trade Agreement). Mexico has the second largest economy in Latin America (after Brazil), and, its capital, Mexico City, is the largest city in North America.
In addition to the strength of the wider economy, the reputation of the Mexican workforce is formidable — both the OECD and WTO rank Mexican employees as the hardest-working in the world. All in all, these considerations make Mexico an excellent location for hiring global talent. Read here to find out the key rules that apply when hiring employees in Mexico.
| Population 130.3M (57.3M labor force) | Capital City Mexico City | Languages Spoken Spanish (4th most spoken language globally) |
| Currency Mexican peso | GDP per capita $9,440 | Ease of Doing Business 60th in the world |
| Minimum Wage 172 pesos per day | Average Wage 485 pesos per day in 2022 | Paid Leave 6-10 days |
In 2020, GDP decreased by 8.2% in Mexico due to the pandemic slowdowns. However, by 2021, GDP increased by 4.8%, and internationally impressive recovery. Furthermore, in 2022, the Mexican economy is projected to expand by 1.9%, an unusual feat in a world economy that is dominated by recession and recession fairs.
Mexico has a skilled workforce that is valuable to employers in many industries: The country boasts an excellent education system meaning well-qualified, but cost-effective employees.
Mexico has relatively strong business and labor regulation: There are labor laws in Mexico surrounding things like minimum wage, overtime pay, discrimination, termination, medical leave, and paid holiday leave.
It is important that any business entering the Mexican market pays careful attention to the rules that apply there to avoid backtaxes, fines and legal action.
In Mexico, there are many similarities in business culture with other North American and European locations. However, there are some key elements to consider:
As in most countries, when recruiting employees, you have the option to carry out the recruitment directly yourself, or to engage a third party to do it. Engaging a third party recruitment agency or global PEO can often be the most cost-effective and efficient hiring option.
Key job sites in Mexico include:
In Mexico, interviews can sometimes be less formal than in North America and some European countries: This means that personal conversations are expected. Relatedly, business relationships in Mexico place a strong emphasis on trust, meaning most employers prefer to interview in person, rather than online. This is slowly starting to change, following the COVID-19 pandemic, with a lot of interviews being carried out online.
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, asking a candidate’s previous salary is not recommended and might be considered overly-intrusive.
On average, in Mexico, employees seek an increase in their salary every 18 months. Depending on industry, and the employee’s experience, level the amount of the sought increase will vary, however, on average the salary increase every 18 months is around 8%.
Onboarding employees in Mexico can be very complex. Mexico is known to have more rigorous labor laws than its other North American neighbors. Significantly, collective bargaining is common, and the influence of the trade unions throughout Mexico can make for a more complex onboarding process.
In Mexico there are seven paid holidays annually. They are as follows:
| Date | Holiday name |
|---|---|
| 1 Jan Sunday | New Year’s Day |
| 6 Feb Monday | Constitution Day |
| 20 Mar Monday | Benito Juárez’s Birthday Memorial |
| 1 May Monday | Labor Day / May Day |
| 16 Sep Saturday | Independence Day |
| 20 Nov Monday | Revolution Day Memorial |
| 25 Dec Monday | Christmas Day |
Salary increases are generally expected around every 18 months in Mexico. Salary increases are dependent on how many years the employee has been with the company, their level within 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 may appear to keep costs low. However, freelancers or contractors are only appropriate for certain kinds of work. To avoid employee misclassification, you should seek advice from Mexico employment experts to ensure that your hiring is legally appropriate.
The basic process for setting up a subsidiary in Mexico is:
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.
Holiday Schedule in Mexico [2023]
