Easily manage employment in Mexico

Payroll services in Mexico

Mexico has a diverse economy with key industries in manufacturing, oil, and technology. With specific labor laws and tax regulations, employers in Mexico must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Mexico

Employers in Mexico must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Mexico’s minimum wage is MXN 248.93 per day.
• Payroll frequency: Salaries are generally paid biweekly or monthly.
• Standard working hours: The normal workweek in Mexico is 48 hours, typically spread over six days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 200% of the regular wage for extra hours and 300% for work on public holidays.

Taxation and social security contributions

• Personal income tax: Mexico has a progressive income tax system with rates ranging from 1.92% to 35% depending on income levels.
• Employer contributions:
• Social security (IMSS): Approximately 7.58% of the gross salary.
• Housing fund (INFONAVIT): 5% of the gross salary.
• Employee contributions:
• Social security (IMSS): Approximately 2.75% of the gross salary.
• Corporate tax: The corporate income tax rate in Mexico is 30%.
• Tax reporting: Employers must file payroll taxes and contributions with the Mexican tax authorities (SAT) regularly.

Payroll compliance in Mexico

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, housing funds, and income tax.
• Employers must stay updated on changes to Mexico’s labor laws and tax regulations to avoid penalties.

Run payroll in Mexico with Remote

Managing payroll in Mexico requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.