Employer of Record
Mexico requires every employer to pay a statutory year-end bonus — the aguinaldo — worth at least 15 days' salary by December 20, separate from monthly payroll withholding and the IMSS social-security enrollment that starts with your first employee. Share the role and your target start date, and PIO helps confirm the arrangement for that hire, then coordinates the contract, payroll and registrations around it.
Practical points to line up before you hire in Mexico.
Mexican law expects a written employment contract that spells out both parties' details, the type of engagement — indefinite, fixed-term or project-based — the exact duties, work location, working hours and how and where salary is paid, issued in duplicate for both employer and employee. Build these details into the offer from day one rather than treating the contract as paperwork to finish later.
Source:Federal Labor Law
Day shifts cap at 8 hours, nights at 7, mixed shifts at 7.5, with mandatory rest breaks. The weekly ceiling phases down under a 2026-2030 reform: 48 hours in 2026, 46 hours in 2027, 44 in 2028, 42 in 2029, and 40 hours from 2030 onward. Overtime to 9 hours weekly earns a 100% premium; beyond that, a 200% premium applies under Article 68.
Source:Federal Labor Law2026 decree on the staged reduction of working hours
Paid vacation is a recognized right for employees in Mexico, starting at 12 working days after the first year of service and increasing progressively — 14 days after the second year, 16 after the third and 18 after the fourth. Build this growing schedule into the employment terms from day one rather than assuming a flat annual allowance.
Source:Federal Labor Law
Employers withhold income tax from wages, remit it to the SAT monthly, and issue each employee an annual earnings statement. IMSS registration begins with your first employee, with notice generally due within five business days of their start date. Processing contributions through SUA becomes mandatory once headcount reaches 5 or more; employers with 1-4 employees may use SUA voluntarily.
Source:Employer tax obligationsSocial Security LawWhat is SUA (social security self-assessment system)
Once your hire is confirmed, here's what we help you coordinate.
You stay in control of the decisions that are yours to make.
A straightforward path from sign-up to your employee's first day.
Share the role, the work location and your target start date, and we'll confirm the available arrangement for that hire.
Once confirmed, we help coordinate the information, contract and payroll setup needed within your arrangement.
You manage the day-to-day relationship; we help coordinate the recurring administration within your arrangement.
Yes — Mexican law requires an annual aguinaldo of at least 15 days' salary, payable to every employee by December 20, and it's a fixed statutory cost separate from any discretionary bonus you choose to add. Budget for it alongside base pay rather than treating it as optional.
Source:Federal Labor Law
Paid vacation starts at 12 working days once an employee completes their first year, then rises to 14 days after the second year, 16 after the third and 18 after the fourth — a faster climb than many countries use. Build that increasing schedule into the offer rather than assuming a flat number every year.
Source:Federal Labor Law
Yes for shift limits: a day shift caps at 8 hours, a night shift at 7, and a mixed shift at 7.5. The 40-hour week itself is not yet in effect: a 2026-2030 reform phases the ceiling down from 48 hours in 2026 to 46 in 2027, 44 in 2028, 42 in 2029, and 40 from 2030. Within whichever ceiling applies, overtime up to 9 hours a week earns a 100% premium (double pay) for 2026, while anything beyond carries a 200% premium (triple pay) under Article 68.
Source:Federal Labor Law2026 decree on the staged reduction of working hours
Income tax is withheld from wages and remitted to the SAT every month regardless of headcount, and IMSS registration begins with your very first employee, with the prescribed notice generally due within five business days of their start date. Processing contributions through IMSS's SUA system becomes mandatory once you reach 5 or more employees, while employers with 1-4 employees may use SUA voluntarily. Either way, these are employer costs layered on top of gross salary, not deductions from it.
Source:Employer tax obligationsSocial Security LawWhat is SUA (social security self-assessment system)
Yes — sign up and share the role, the intended work location and your target start date, and PIO confirms the available arrangement for that specific hire. From there we help coordinate the practical steps of getting the hire started, so you don't need to register your own entity in Mexico.
We help coordinate the local employment contract, onboarding paperwork and payroll setup — including the aguinaldo payment and your IMSS registration and contributions — based on the role and terms you decide. The written agreement you sign with PIO sets out exactly how those responsibilities are split for that specific hire.
Practical guidance is grounded in these official references, but local law and public requirements can change and should be reconfirmed. Your PIO contract and quote govern only PIO's service scope, terms and fees.
Sign up to start an EOR hire in Mexico. Share the role, the work location and your target start date, and we'll confirm the available arrangement — or book a demo first to talk it through with our team.
