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Hiring employees in Mexico involves more than paying salaries. Employers must comply with a structured system of statutory social security and payroll-related contributions that directly impact total employment cost and legal compliance.
This guide explains all mandatory employer contributions in Mexico for 2026, how they are calculated, when they must be paid, and how global companies can stay compliant when hiring Mexican talent.
What Are Employer Contributions in Mexico?
Employer contributions in Mexico (cuotas obrero-patronales) are mandatory payments required by law to fund social security, healthcare, pensions, housing, and workplace protection.
They are primarily regulated by the Ley del Seguro Social (LSS) and administered through institutions such as:
- IMSS (Mexican Social Security Institute)
- INFONAVIT (National Housing Fund)
- AFORE (Retirement Savings System)
- State tax authorities (payroll tax)
These contributions are calculated based on the Salario Base de Cotización (SBC).
Salario Base de Cotización (SBC): The Contribution Base
The Salario Base de Cotización (SBC) includes most forms of employee compensation, such as:
- Base salary
- Bonuses and commissions
- Overtime (with legal limits)
- In-kind benefits
Certain items are excluded (under specific thresholds), such as:
- Profit sharing (PTU)
- Employer social security contributions
- Some pantry vouchers and punctuality bonuses
Cap for 2026:
- SBC cannot exceed 25 UMA per day
- SBC cannot be lower than the legal minimum wage
Mandatory Employer Contributions in Mexico (2026)
Main Employer Contributions Overview
| Contribution | Managing Institution | Employer Rate | Payment Frequency |
|---|---|---|---|
| Occupational Risk Insurance (RT) | IMSS | 0.5% – 15% (risk-based) | Monthly |
| Health & Maternity (Medical Care) | IMSS | Fixed + 6% on SBC above 3 UMA | Monthly |
| Health & Maternity (Cash Benefits) | IMSS | 0.70% | Monthly |
| Disability & Life Insurance | IMSS | 1.75% | Monthly |
| Retirement (SAR – Retiro) | IMSS / AFORE | 2% | Bimonthly |
| Old-Age & Severance (Cesantía y Vejez) | IMSS / AFORE | ~3.15% – 7.51% (2026 phase) | Bimonthly |
| Housing Fund (INFONAVIT) | INFONAVIT | 5% | Bimonthly |
| Daycare & Social Services | IMSS | 1% | Monthly |
| State Payroll Tax | State Authority | ~2%–3% (varies by state) | Monthly |
- Estimated total employer burden: typically 25%–35% of gross salary, depending on salary level, risk class, and state payroll tax.
Example: Employer Contributions Based on Mexico’s Minimum Wage (2026)
To better understand how employer contributions work in practice, let’s look at a simplified example using Mexico’s general minimum wage.
Assumptions
- Daily salary: MXN 315.04
- Monthly salary (30 days): MXN 9,451.20
- Salario Base de Cotización (SBC): MXN 315.04 (minimum wage)
- Employee risk class: Low-risk activity (Class I)
- State payroll tax: Not included (varies by state)
Estimated Employer Contributions (Monthly)
| Contribution | Employer Rate | Estimated Monthly Cost (MXN) |
|---|---|---|
| Occupational Risk Insurance (RT – Class I) | ~0.54% | ~51.04 |
| Health & Maternity – Fixed Quota | Fixed (UMA-based) | ~450.00 |
| Health & Maternity – Cash Benefits | 0.70% | ~66.16 |
| Disability & Life Insurance | 1.75% | ~165.40 |
| Retirement (SAR – Retiro) | 2% | ~189.02 |
| Old-Age & Severance (Cesantía y Vejez – 2026 rate) | ~3.15% | ~297.70 |
| Daycare & Social Services | 1% | ~94.51 |
| INFONAVIT Housing Fund | 5% | ~472.56 |
| Estimated Total Employer Contributions | — | ~MXN 1,786.39 |
What This Means for Employers
- Employer contributions represent approximately 19%–22% of the employee’s gross salary at minimum wage level
- The actual percentage increases with higher salaries due to progressive pension contributions
- State payroll tax (2%–3%) would increase the total cost further, depending on employee location
Important: This is an illustrative example. Exact amounts may vary based on:
This example is based on Mexico’s general minimum wage and is provided for illustrative purposes only. Employer contributions—particularly Old-Age & Severance (Cesantía y Vejez)—are progressive and vary according to the employee’s Salario Base de Cotización (SBC), measured in UMA multiples. Rates increase as salaries rise and follow the statutory brackets in force for 2026, with scheduled increases through 2030. State payroll taxes may also apply and vary by location.
- Risk classification
- UMA value updates
- State payroll tax
- Salary adjustments or benefits
Why This Example Matters for Global Employers
For foreign companies hiring in Mexico, underestimating these contributions can significantly impact:
- Employment cost forecasting
- Budget accuracy
- Compliance risk
This is why many international employers choose an Employer of Record (EOR) to manage payroll and statutory contributions correctly from day one.
Hiring in Mexico and unsure about payroll costs?
Payment Deadlines and Filing Obligations
Monthly Obligations
- IMSS contributions must be paid by the 17th of the following month
- Filed through SUA / IDSE systems
- Paid via SIPARE reference line
Bimonthly Obligations
- INFONAVIT (5%)
- Retirement & pension funds
- Paid every two months but usually integrated into monthly IMSS payments
Late payments may result in:
- Surcharges and interest
- Fines up to 100% of omitted amounts
- Employer liability for employee benefits if coverage lapses
Common Compliance Risks for Foreign Employers
Foreign companies hiring in Mexico often face issues such as:
- Incorrect SBC calculation
- Misclassification of occupational risk rates
- Late or incomplete IMSS registration
- Failure to comply with INFONAVIT deposits
- Errors in payroll software configuration
Even small mistakes can trigger audits, penalties, or retroactive liabilities.
How Serviap Helps You Hire in Mexico via EOR
Hiring in Mexico doesn’t have to mean navigating complex payroll rules alone.
With Serviap’s Employer of Record (EOR) in Mexico, we:
- Act as the legal employer on your behalf
- Register employees with IMSS and INFONAVIT
- Calculate and pay all employer contributions accurately
- Manage payroll, filings, and deadlines
- Ensure full compliance with Mexican labor law
Hire talent in Mexico without setting up a local entity.
Employer Contributions in Mexico – FAQs
Are employer contributions mandatory for all employees in Mexico?
Yes. All employees under the mandatory IMSS regime must be covered from day one of employment.
Do employer contributions apply to remote employees in Mexico?
Yes. Remote workers based in Mexico are subject to the same IMSS and INFONAVIT obligations.
Is the payroll tax part of social security?
No. The payroll tax is a state-level tax, separate from IMSS and INFONAVIT contributions.
Can employer contributions change during the year?
Rates are stable, but UMA values, minimum wage, and risk premiums may be updated annually.
What happens if contributions are not paid on time?
IMSS may impose fines, interest, audits, and hold the employer liable for employee benefits.
