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Employer of Record Mexico

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Employer of Record Mexico

Mexico’s complex labor regulations often present challenges for businesses. Agility provides a streamlined solution for hiring local talent.

Currency

Mexican peso (MXN)

Population

130 Million

Capital City

Mexico City

Minimum Wage

MXN 566.80-853.56 per month

Local Language

Spanish

Working Hours

40-48 hours per week

Employer of record in Mexico

When you hire in Mexico, the Employer of Record in Mexico acts as the legal employer for your workers, taking care of the entire employment life cycle. This includes handling all the legal legwork, such as payroll, taxes, mandatory benefits, employment contracts, and ensuring compliance with Mexico labor laws.

  • Manages all aspects of employment
  • Acts as a legal employer
  • Simplifies the recruitment process

How does an Employer of Record Mexico work?

Agility

We handle the legal aspects of hiring employees, including managing HR, benefits, payroll, and taxes.

Company

Focuses on core business operations. Oversees the responsibilities and performance of specific employees.

Employee

Executes the assigned tasks, just like any other team member.

Payment Frequency

In Mexico the most frequent pay cycle is biweekly.

 

Employee Tax – 4.7% to 37.7%

Social security: 1.65%

Retirement: 1.1%

Income tax: 1.92% – 35%

 

Employer Tax – 39.69% to 46.72%

Social security: 26.54% – 33.58%

Retirement: 5.15%

National housing fund: 5%

Payroll: 3%

 

Probation Period

In Mexico the probationary period is 30-180 days.

 

Employment Law

Employment agreement: Contract of employment, work agreement

Payslip: Pay stub, wage statement

Remote work: Work-from-home, telework, virtual work

Right to disconnect: Right to unplug, work-life balance policy

Protection from discrimination: Anti-discrimination policy, equal opportunity

Personal data protection: Data privacy, data security

Profit sharing: Bonus scheme, profit-sharing plan

List of guarantees in case termination: Severance package, termination benefits

Intellectual property rights protections: IP rights, intellectual property safeguards

 

Employee Termination

Mexican law has various reasons for terminating employment, such as mutual agreement, employer’s decision due to commercial insolvency or bankruptcy, and employee’s physical or mental inability to perform their job. If the employee is permanently disabled due to work-related risks, they should receive compensation.

Employees can be terminated within their probationary period without the employer facing any consequences. An employee has the right to file a legal complaint about being unfairly fired with the court system.

Severance pay is a mandatory payment that employers must make to employees upon termination of their employment contract in Mexico. The amount and conditions of severance pay can vary depending on the circumstances of the termination.

Employee Benefits

Statutory Benefits

Pension: Retirement plan, retirement benefits

Holiday entitlement: Vacation allowance, time off

Vacation and Christmas bonus: Paid time off, holiday pay, year-end bonus

Occupational accident and risks: Workplace safety, worker’s compensation

Sickness and maternity: Health insurance, sick leave, maternity leave

Old age severance insurance: Retirement severance, retirement benefits

Old age insurance: Retirement pension, retirement plan

Day care: Childcare, daycare services

Common Additional Benefits

Paid relocation: Relocation assistance, moving allowance

Life insurance: Death benefit, life cover

Major medical expense insurance: Health insurance, medical coverage

Private medical insurance: Health insurance, health coverage

Statutory Leave

6-12 days and 8 bank holidays
Six days of paid sick leave per year
12 weeks maternity leave
Parental leave is decided upon request
5 days paternity leave

FAQ

Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.

Agility EOR
  • We manage the onboarding process and ensure everything’s in order before your employee starts
  • We make sure your employees are treated fairly and compliantly in their relevant territory
  • We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
  • We provide compliant contracts, process local payroll, and file taxes
  • We issue payslips and handle payments to the employee and authorities
Your Company
  • You find and manage your employees’ daily tasks
  • You support their development through their work
  • You follow our guidance on employment laws and best practices
  • You ensure payroll bills are paid to Agility EOR on time

 

Benefits of using an Employer of Record (EOR)

  • Faster and easier hiring: No need to set up your own legal entity.
  • Reduced risk and compliance burden: We handle the legal and administrative complexities.
  • More time and resources: Focus on your core business while we manage your employees.

Yes, as long as the worker is working for other companies, is able to decide how to do their own work, and can send another contractor in their absence.

It is important to correctly classify a worker in Mexico as an employee if they are solely dedicated to your company and their duties are dictated by your organization.

Failure to do so can result in significant fines, the need to pay outstanding holiday pay and social security contributions, the potential requirement to establish a local presence, and possible legal action from the employee for violating their employment rights.

Yes, as long as the worker is working for other companies, is able to decide how to do their own work, and can send another contractor in their absence.

It is important to correctly classify a worker in Mexico as an employee if they are solely dedicated to your company and their duties are dictated by your organization.

Failure to do so can result in significant fines, the need to pay outstanding holiday pay and social security contributions, the potential requirement to establish a local presence, and possible legal action from the employee for violating their employment rights.

Starting up your business in Mexico starts with registering it with the Commercial Register and getting a trade license from the appropriate authorities.

Even though the registration process may seem straightforward, setting up a physical office for tax purposes, opening a Mexican bank account (usually requiring a personal visit), using payroll software that complies with Mexican laws, and meeting tax filing requirements can make the process more complex.

When hiring people in Mexico it is crucial to comply with specific legal requirements. Essentially, HR compliance ensures that your company fully abides by all employment and labour laws.

But why is this significant? HR compliance in Mexico extends beyond just fulfilling formalities; it protects both your employees and your business. Adhering to employment regulations ensures equitable treatment for your staff, covering areas such as sick leave, vacation time, minimum wage, and suitable working hours. This not only promotes a favourable workplace atmosphere but also reduces the chances of facing financial fines, legal consequences, and potential lawsuits due to non-compliance.

When you partner with Agility EOR as your Employer of Record in Mexico, you can simplify your tax and social security obligations. We handle all the required documentation and payments for your employees, ensuring compliance with regulations. This frees you up to focus on running your business without any concerns.

Agility EOR handles the complexities of Mexican labor regulations and ensures adherence, while your company is responsible for the day-to-day supervision and interaction with your employees. This involves addressing performance concerns, enforcing disciplinary actions as necessary, and fostering a positive workplace atmosphere through open communication.

Agility EOR handles the legal side of things in Mexico , so you can focus on managing your team and their daily tasks.

Employers in Mexico are responsible for withholding and paying income tax (ISR) on behalf of their employees, while employees contribute to social security taxes (IMSS). Additionally, employers must pay various employer contributions to the IMSS, including those for healthcare, retirement, and other benefits.

Employees working under a Mexico Employer of Record benefit from legal protections and receive a standard employment contract. This includes statutory benefits like maternity leave, annual leave, and sick pay, along with applicable tax credits. It’s important to note that the Mexico public healthcare system provides coverage for all residents, not just employees.

Agility EOR handles the administrative burden of HR compliance for you:

Trusted Partners: Agility EOR partners with top-tier employment attorneys and consultants in Mexico to guarantee full compliance with local legal regulations in all employment contracts and essential documentation.

Comprehensive Expertise: Our team possesses extensive knowledge of various facets of Mexican labour laws, such as payroll, social security, data protection, termination notice periods, and remote work guidelines.

Prompt Support: In case of any concerns, our dedicated internal staff is readily available to provide immediate assistance and guidance.

Wondering if expanding in Mexico is right for you?

Read on or speak to a member of our team now

Mexico Employer of Record Benefits

When you choose Agility EOR to expand in Mexico, we guarantee an EOR Service tailored to the needs of your business

Compliance

We are on top of regulatory changes in Mexico so you can relax.

Cost reduction

Allow our economies of scale to work in your favour.

High Service Levels

You and your employees have a dedicated account manager.

Fixed Cost Pricing

We will agree our professional fees up front based on your needs – no nasty surprises!

Consolidated Invoicing & Payments

Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.

Fast delivery

You can have 'boots on the ground' within days on our infrastructure.

Reduced Risk

All wage taxes are remitted in full to the Mexican authorities by professionals ensuring liabilities are met, giving you peace of mind.

Supply Chain Transparency

We only pay employees through local full employed solutions meaning Mexican payroll tax is paid on all funds.

Save Time and Money

Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.

Download our full Mexico Employment Guide

Find out all about employing in Mexico

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