Table of Contents


Table of Contents


Mexican Peso (MXN)

Payroll Frequency


Employer Taxes

36.69 – 43.72%

About Mexico

Mexico is a strip of land connecting the continents of North and South America. In the north, Mexico borders the United States, and to the south, Belize, Guatemala, and the Caribbean Sea. To the east, Mexico is bordered by the Gulf of Mexico and to the west, the Gulf of California. Mexico lies in one of the most earthquake and volcanic-prone areas in the world. The country is made up of 31 states where the federal district of Mexico City is the capital.

Most Mexicans live in urban areas despite the fact that the country is among the most populous in the region. There are three classifications of ethnic groups in Mexico: the Mestizo or Amerindian-Spanish who account for over 60 percent of the population; Amerindian people who account for just over 20 percent; and white people. More than 90 percent of Mexicans speak Spanish which is the national language. Some speak the indigenous languages of Mayan and Nahuatl. The country’s social life is largely based on religious values and those of family and the community and over 80 percent of the country’s people are Catholic.

Employment Relationship

• Permanent Employment

In Mexico, permanent employment contracts are those concluded for an indefinite duration. Employment contracts that don't explicitly state the duration are considered to be valid for an indefinite duration. Permanent employees or those who are hired for more than 180 days can be subject to probation. 

• Fixed-Term or Specific-Purpose Contracts

Fixed-term or specific-purpose contracts may only be established when the nature of the work demands it or when its purpose is to temporarily replace a worker. The duration of the contract must be explicitly stated and cannot exceed one year.

• Temporary Employment Contratcs

Mexico's Federal Labor Law does not distinguish temporary and fixed-term/specific-purpose employment. Such contracts may only be established when the nature of the work demands it or when its purpose is to temporarily replace a worker. The duration of the contract must be explicitly stated in the employment contract and cannot exceed one year. In April of 2021, the Mexican Federal Government amended several provisions of the Federal Labor Law. The goal of these amendments was to generally prohibit employer subcontracting or "outsourcing," which the law defines as "when a natural or legal person provides or makes available their own workers for the benefit of another."

Probationary Period

The Federal Labor Law of Mexico provides for probationary periods when employees are hired on indefinite term contracts or contracts longer than 180 days. Usually, the probationary period cannot last more than 30 days. However, for employees in managerial, technical, or professional positions, it may last up to 180 days. At the end of the trial period, if the worker does not satisfy the requirements and knowledge necessary to carry out the work, the employment relationship will be terminated, without responsibility for the employer. The initial training and probationary periods are non-extendable. Employees can be dismissed without notice during probation. 

Working Hours

Employees may work at most six days in any given week. Working hours must not exceed eight hours per day and 48 hours per week. Working hours during the night shift cannot exceed seven hours per shift.   The working day of minors under 16 cannot exceed six hours a day and should be divided into periods not exceeding three hours.

Holidays / PTO

• Statutory Holidays

January 1 – New Year’s Day (Año Nuevo); First Monday in February – Constitution Day (Día de la Constitución); Third Monday in March – Birthday of Benito Juarez (President of Mexico from 1858 to 1872); May 1 – Labor Day (Dia del Trabajo); September 16 – Mexican Independence Day (Día de la Independencia); Third Monday in November – Revolution Day (Día de la Revolución); December 25 – Christmas Day (Navidad). There are additional (optional) holidays observed in some and not all states.

• Paid Annual Leave

Employees with more than 1 year of service are entitled to 12 working days of annual leave, which will increase by 2 working days, up to 20, for each subsequent year of employment. As of the sixth year, the vacation period will increase by 2 days for every 5 days of services. Minors under the age of 16 years are entitled to 18 days of annual leave. Employers cannot pay compensation in lieu of annual leave, and the leave must be taken within 6 months of the end of the service year. Employees whose contract is terminated before the end of the year of service will be entitled to remuneration for the annual leave not taken, proportionate to the duration of service during the year.

• Sick Leave

The employer is fully responsible for paying the first three days of sick leave. From the fourth day, the Social Security Institute pays either: 60% of the employee’s salary if leave is due to a non-work related illness or accident 100% of the employee’s salary if sick leave is due to a work-related illness or accident Benefits are paid for up to 52 weeks.

• Maternity Leave

Maternity leave is fully paid through the Social Security Institute and for 12 weeks or 84 days (42 days before and 42 days after delivery). Women are also entitled to six weeks of paid leave for adoption. To avail herself of cash benefits, a worker must have contributed for at least 30 weeks during the 12 months preceding the date when payment is due to begin. If the child was born with a disability or needing hospital care, leave may be extended with 50% of the worker's salary for a period not exceeding 60 days.

• Paternity Leave

Working fathers are entitled to a paternity leave of five paid working days following their child's birth or adoption.

Termination of Employment

• Notice Period

In Mexico, there are no minimum notice period requirements. In cases where employment is being rescinded due to the worker's actions (or lack thereof), Mexico's Labor Law dictates that notice must be given to the employee personally and in writing at the time of dismissal or within five working days. It must state the conduct that led to termination and the date at which said acts were committed.  In cases where the employee is terminating employment due to circumstances related to the employer or workplace, the worker may withdraw from employment within the 30 days following the cause of withdrawal. In such cases, the worker retains the right to receive damages from the employer.

• Severance Benefits

Severance benefits are paid if an employee is dismissed due to the business's inability to afford the operation, bankruptcy of the employer, or any other unforeseen circumstances unrelated to the employer. The amount of severance benefits paid is as follows: Fixed-term contract of less than one year – wages for half the time of services rendered Fixed-term contract of more than one year –  six months of wages for the first year and 20 days for each of the following years Employment for an indefinite term –  20 days of salary for each year of service If the contract is terminated due to physical or mental disability from a non-professional risk – one month's salary plus an additional 12 days of salary for each year of service If the contract is terminated due to a reduction of staff caused by the implementation of new machinery or methods of work – four months of salary, plus 20 days for each year of service