Countrypedia · Americas
Hiring in Mexico
A practical guide to employing staff in Mexico — contracts, working time, leave, termination, payroll and employer costs for 2026, including the phased move to a 40-hour week.
Employment contracts
The Federal Labour Law (LFT) requires written contracts in Spanish. Employment is presumed to be indefinite; fixed-term and project contracts are allowed only where the nature of the work justifies them.
- Probation: up to 30 days (180 days for managerial or technical roles), only in indefinite contracts.
- Subcontracting of personnel is prohibited since 2021, except for specialised services registered with REPSE.
- Every employee must be registered with IMSS before starting work.
Working hours
| Maximum week (2026) | 48 hours (8 hours a day, day shift) |
|---|---|
| Move to 40 hours | The maximum falls to 46 hours in 2027, 44 in 2028, 42 in 2029 and 40 in 2030 |
| Overtime | Double pay for the first 9 hours a week; triple pay beyond that |
| Rest | At least 1 rest day per 6 days worked; Sunday premium of 25% |
Minimum wage
| General minimum wage (2026) | MXN 315.04 per day |
|---|---|
| Northern border free zone (2026) | MXN 440.87 per day |
Leave and holidays
| Vacation | 12 days after the first year, rising by 2 days a year to 20 days in year 5, then 2 more days every 5 years |
|---|---|
| Vacation premium | At least 25% of the salary for the vacation days |
| Aguinaldo (Christmas bonus) | At least 15 days’ salary, paid by 20 December |
| Maternity | 12 weeks, paid by IMSS |
| Paternity | 5 working days on full pay |
| Statutory holidays | 7–8 days a year |
Notice and termination
There is no “at will” employment. Dismissal is only justified for causes listed in the LFT, notified in writing. Otherwise it is treated as unjustified.
| Unjustified dismissal | 3 months’ integrated salary + 20 days’ salary per year of service + back pay where claimed |
|---|---|
| Seniority premium | 12 days’ salary per year of service (capped at twice the minimum wage), also payable on voluntary resignation after 15 years |
| Notice | No statutory notice period; terminations are usually settled by agreement before the labour authorities |
| Final settlement (finiquito) | Accrued salary, vacation, vacation premium and proportional aguinaldo |
Payroll and employer costs
Every payment needs an electronic payroll receipt (CFDI de nómina). Income tax (ISR) is withheld at progressive rates up to 35% and paid to SAT monthly.
| IMSS social security | Employer share typically 20–25% of the contribution base, depending on salary and risk class |
|---|---|
| INFONAVIT (housing) | 5% of the contribution base |
| SAR (retirement) | 2% plus retirement and old-age contributions rising under the 2020 pension reform |
| State payroll tax | 1%–4% depending on the state (3% in Mexico City) |
| PTU (profit sharing) | 10% of the company’s taxable profit, shared among employees, capped at 3 months’ salary or the 3-year average |
Benefits and practice
- Grocery vouchers (vales de despensa) and savings funds are common tax-efficient benefits.
- Major medical insurance (gastos médicos mayores) is standard for professional staff.
- Foreign nationals need a temporary resident visa with work permission.
Hire in Mexico with Truerix
Truerix employs your Mexican staff through our own local entity — Spanish-language contracts, IMSS and INFONAVIT registration, CFDI payroll receipts and PTU handled for you.
Sources: Infobae – 40-hour week and minimum wage · IDC – Nuevo salario mínimo 2026 · KPMG Mexico – 40-hour reform and minimum wage 2026 · IMSS