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hire in Mexico

Mexico PEO &
Employer of Record



PAYROLL TAX 36.69% – 43.72%


TIME TO HIRE 12 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

Hire in Mexico

Horizons provides compliance solutions to ensure your business in Mexico operates in line with Mexican labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, Mexico in a range of industries, from customer service, to accounting services, to software development.

We also process monthly payroll, and, as a Mexico Employer of Record, absorb all local employer liabilities. Partnering with our Mexico PEO is the quickest and most cost-effective way to enter the Mexican market.

Map of Mexico

Facts & Stats

PEO Platform Hire in Mexico, and pay employees through our platform or app. PEO Cost Our Mexico PEO solution is the most affordable on the market. Time-to-hire Fast onboarding in Mexico, hire in as little as 12 hours.
Contracts We draft labor contracts compliant with Mexican labor law. Local Benefits We administer all mandatory benefits and contributions in Mexico. 180+ Countries It doesn’t stop with Mexico — we are an international PEO
stay compliant with Mexico labor laws

Employment Laws

Mexico employment contracts

Employers in Mexico are legally required to provide formal written contracts of employment for all employees. Any contract should include all relevant details such as salary/wage, termination terms, job title, and so on. Contracts should also always be written in Spanish and use the Mexican peso currency (MXN).

By partnering with our Mexico Employer of Record & PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations. 

Probationary period

30 days max. for regular employees

Not possible if contract is for <180 days

Termination notice periodNot legally required; 30 days is standard, according to the employment agreement
SeveranceOnly in cases of termination without reason for employees with 15+ years’ experience: 12 days’ salary per year of service (max. 2 months’ salary)
Special noteContract type is not standard for PEO services due to requirement for fixed-term contracts to be justified by either (1) nature of the work or (2) for an employee replacement.
Probationary period

30 days max. for regular employees

180 days max. for management, administrators, or specialized employees.

Termination notice periodNot legally required; 30 days is standard, according to the employment agreement
SeveranceOnly in cases of termination without reason for employees with 15+ years’ experience: 12 days’ salary per year of service (max. 2 months’ salary)

Mexico working hours

The average Mexican office operates between 8 am-6 pm from Monday to Friday, although this can vary by industry and company. Some companies still offer extra-long lunch breaks (or ‘siestas’), but the normal length is around one hour.

Working hours are limited to 11 per day and 50 per week, with at least one 24-hour period off per week, and if limits are exceeded then overtime pay must be provided at 1.5 x normal pay.

Hire compliantly in Mexico without a local entity.

Quick, compliant hiring in 12 hours—no subsidiary required.

Public holidays in Mexico

There are several nationally and regionally recognized public holidays in Mexico. Employees who have to work on these days are often entitled to overtime pay:
Date Holiday name
1 Jan Sunday New Year’s Day
6 Feb Monday Constitution Day
20 Mar Monday  Benito Juárez’s Birthday Memorial
1 May Monday Labor Day / May Day
16 Sep Saturday Independence Day
20 Nov Monday Revolution Day Memorial
25 Dec Monday Christmas Day

Mexico vacation leave

After one year of employment, workers in Mexico are entitled to 12 days of vacation leave. This entitlement increases by two days for every additional year up to four years of employment, then two days per five years of employment.

Many employers choose to offer more generous vacation allowances, with more senior employees regularly getting 15 or more days per year.

Mexico sick leave

Usually, employees can take sick leave upon agreement with their employer, and compensation will depend on the individual agreement. In cases of non-work-related sickness, employees can access a government-funded 60% of wages if they present a doctor’s note, and for work-related sickness, they can receive 100% of wages.

Maternity and paternity leave in Mexico

Mothers can take six weeks of paid maternity leave before and after their birth date (12 weeks in total), and fathers can take five days of paid leave. The government covers these payments, and the limit is 2500% of the minimum wage.

It is common for employers to offer additional payments as part of benefits packages.

Employee severance and terminations in Mexico

Termination payments in Mexico are very complex and are made up of a variety of inputs:

  • – Unpaid wages
  • – Holiday bonuses
  • – Outstanding vacation days
  • – 13th month bonuses
  • – Any other benefits or payments included in the contract of employment

If employees are terminated without proper cause, they may also be entitled to a severance payment. In these cases, the employee will receive three months of salary, an additional 20 days for every year of employment, and a seniority bonus of 12 days of salary for every year of employment (at a limit of 200% minimum wage).

In practice, many terminations will result in a severance payment as it is notoriously difficult to prove ‘proper cause’ to the authorities.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Mexico PEO can mitigate risk for foreign companies and provide guidance through this process.

Taxation in Mexico

Mexico follows a progressive taxation system, with employees paying a higher percentage in tax at higher income levels, with a maximum rate of 35%. Non-residents pay up to 30%.

The corporate tax rate in Mexico is 30%.

Contributions for retirement are unique and difficult to understand. The Mexican Administrator of Retirement Funds (AFOREs) handles retirement and housing accounts for employees, and workers can choose what they want to start funding, then employers will have to contribute a percentage of salary to these funds. The percentages can vary for the type of worker, and AFORE accounts will be automatically assigned by the government if an employee hasn’t chosen an account after one year of employment.

Health coverage in Mexico

The IMSS provides healthcare coverage for Mexicans, so health benefits are not strictly necessary through employers. However, the healthcare system is known for long wait times and shortages, so it’s fairly common for employers to offer private insurance.
hassle-free Mexico compensation & benefits

Compensation & Benefits

Compensation Laws in Mexico

As of 2020, the minimum wage in most of Mexico is 123.22 pesos per day. There is a higher rate in the northern border states of 185.56 pesos per day.

The aguinaldo (or Christmas Bonus) is a yearly bonus, which employees in Mexico are also entitled to at a rate of 0.5 months’ – 1 months’ salary, and sometimes more depending on the employer.

Employers are also required to pay a ‘Vacation Premium’ to employees taking annual leave. The vacation premium is a lump sum paid at a rate of 0.25 times the annual salary, to be paid on employees’ work anniversaries.

Benefit management in Mexico

Establishing a Mexican benefits package as a foreign employer can be a difficult process, and administrative procedures to follow, complex laws, and language barriers.

A simple solution is to outsourcing your Mexico benefits management to Horizons. We can establish your benefits system quickly and effectively, offering expert guidance along the way so you can focus on a successful expansion operation. 

Horizons’ Mexico PEO can provide expert guidance to help simplify the process of expanding into Mexico.

Hire in Mexico in 12h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.


A Mexico PEO and a Mexico EOR are two types of companies which specialize in providing human resources services to businesses in Mexico.

The main difference between a Mexico PEO and a Mexico EOR is in the scope of their services.

Mexico PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Mexico PEO is essentially outsourcing your HR duties in Mexico.

Mexico EORs actually take over as the legal employer of your employees based abroad. Mexico EORs become responsible for labor compliance for your employees in Mexico.

At Horizons, we offer both PEO and EOR services in Mexico. Get in touch now and let us know what service you are seeking.

A PEO in Mexico can feasibly hire both local and foreign nationals to work in Mexico.

However, the ability of Horizons to sponsor your foreign national employee in Mexico may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

In most cases, Horizons’ Mexico PEO can hire & onboard your employee within 12 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Mexico.

It is possible to get a work visa in Mexico. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Mexico are limited, however—get started today to secure your employees’ visa spot.