Overview

Capital
Mexico City
Currency
Peso
Date Format
dd/mm/yyyy

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Taxes

Employer
26.35% - Social Security
2.00% - Retirement
5% - Housing Fund
Employee
1.65% - Social Security
1.92% - Up to 6,942.35
6.40% - 6,942.35 - 58,922.27
10.88% - 58,922.27 - 103,550.51
16.00% - 103,550.51 - 120,372.95
17.92% - 120,372.95 - 144,119.39
21.35% - 144,119.40 -290,667.83
23.52% - 290,667.83 - 458,132.39
30.00% - 458,132.39- 874,650.11
32.00% - 874,650.11 - 1,166,200.11
34.00% - 1,166,200.11 - 3,498,600.11
45.00% - Over 3,498,600.11

Minimum Wage

General

The minimum hourly wage is 123.22 MXN.

Working Hours

General

Full time employment is considered 8 hours daily, 40 hours weekly.

Overtime

Overtime is calculated on a weekly basis.  If an employee works up to 8 hours of overtime in a week, they are entitled to be compensated at the rate of 200% of their regular pay, and 300% for 9 or more hours. 

VAT

General

16% standard rate.

Mandatory Benefits

Pension Fund

The employer contributes 3.15%. The employee contributes 2%, with a contribution limit of 25 times the minimum wage.

Social Security

5.15% of covered payroll (old age) plus 1.75% (disability and survivors). The minimum monthly earnings used to calculate contributions are the legal monthly minimum wage.

Vacation Pay

Premium of 25% of wage during vacation.

Payroll

Payroll Cycle

Payroll cycle can be weekly, bi-weekly, semi-monthly (15 days) or monthly. 

For blue collar employees, it is mandatory to pay on a weekly basis.  

Termination

Termination Process

Under Mexican law, an employee can be terminated for a multitude of reasons, however, by law, an employee must behave with integrity while at work.  “Lack of integrity,” therefore, is a common generic reason given for dismissal. 

Advance Notice

No advance notice needed.

Severance Pay

Voluntary resignation: the employer must pay the employee all benefits that are due.  If the employee has 15 years or more of seniority, the employee is entitled to 12 days’ salary for each year employed. 

Termination with cause: The employer must pay the employee all benefits that are due.  In addition, 12 days of salary for each year employed.

Termination without cause:  3 month’s salary, 20 days for each year in the company and a seniority bonus of 12 days per year of service.  The employee will also receive back salary from the date of dismissal to the day that the employer complies with the Labor Board’s decision.