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Looking to hire in Mexico without setting up a local company? An Employer of Record (EOR) in Mexico lets you onboard, pay, and manage compliant teams fast—with local payroll, benefits, and HR handled by a trusted EOR provider. This guide explains how EOR Mexico works, costs, compliance, and when it’s the right choice.
What is an Employer of Record in Mexico?
An Employer of Record (EOR) in Mexico is a licensed local entity that becomes the legal employer of your team in‑country, while you direct day‑to‑day work. The EOR provider in Mexico signs the employment contract, registers workers with authorities, runs compliant payroll, contributes to social security, administers statutory and optional benefits, and manages HR compliance. You keep full operational control and IP ownership; the EOR assumes employer‑of‑record liabilities and filings.
Compared to opening a subsidiary, EOR services in Mexico allow you to hire quickly without an entity—often in days, not months. This makes EOR Mexico ideal for pilot teams, rapid market entry, or distributed hiring when headcount is small or uncertain. If you later scale, you can transition employees from the EOR to your own entity with continuity and minimal disruption.
How Employer of Record in Mexico works (step‑by‑step)
- Scoping & quote: You share roles, salaries, location, and benefits. Your EOR provider Mexico confirms eligibility and pricing.
- Offer & contract: We issue a locally compliant employment agreement in Spanish (plus English summary), aligned to Mexico’s Federal Labor Law.
- Onboarding & registrations: The employee is registered for social security (IMSS), housing fund (INFONAVIT), and tax (SAT).
- Payroll & benefits: Monthly payroll is processed with CFDI e‑receipts (timbrado), taxes and employer contributions are remitted, and benefits are administered.
- Ongoing HR: We manage time off, local holidays, and employee relations; you supervise performance and deliverables.
- Offboarding: If needed, separations follow Mexican law, calculating accrued benefits and any statutory severance.
When to use Employer of Record in Mexico vs alternatives (entity, PEO, contractors)
Choosing the right model depends on headcount, duration, and compliance risk. Mexico has strict rules on outsourcing and misclassification, so the right structure matters. Below is a quick comparison of EOR Mexico versus opening your own entity, a classic PEO model, or engaging independent contractors.
| Model | Best for | Speed to hire | Compliance & risk | Admin burden | Notes |
| EOR Mexico | 1–50 hires, pilots, distributed teams | Fast (days) | High compliance; EOR is legal employer | Low | Hire without entity in Mexico; scalable. |
| Own entity (subsidiary) | Long‑term, 20+ hires, operations | Slow (months) | High (you hold all obligations) | High | Requires incorporation, bank, payroll setup. |
| PEO (co‑employment) | Benefits admin for existing entity | Medium | You remain employer; co‑employment | Medium | Requires a local entity in Mexico. |
| Independent contractors | Short projects, true freelancing | Fast | Misclassification risk if treated as employees | Low/Medium | Not suitable for ongoing, subordinate roles. |
Benefits of using an Employer of Record in Mexico provider
- Hire without entity in Mexico: enter the market quickly and compliantly.
- Full compliance: local contracts, payroll CFDI, social security, tax, and benefits administered by an employer of record company in Mexico.
- Lower fixed costs: avoid incorporation, local accounting, and ongoing entity overhead until scale warrants it.
- Reduced risk: the EOR provider Mexico assumes employer‑of‑record filings and helps mitigate misclassification and outsourcing pitfalls.
- Better candidate experience: clear local benefits (IMSS, vacation, aguinaldo, INFONAVIT), timely pay, and responsive HR in Spanish.
- Scalable: start with one employee and grow; switch to your own entity later if needed.
- LatAm coverage: consolidate multi‑country hiring with a single partner experienced across Latin America.
Mexico compliance essentials for employers
• Contracts: Written employment agreements in Spanish are standard, specifying role, salary, location, schedule, probation (up to 30 days; up to 180 days for managerial or specialized roles), and confidentiality/IP terms.
• Payroll: Salaries are paid at least twice monthly or monthly, with CFDI electronic payroll receipts (timbrado). Employer pays social security and housing fund (INFONAVIT) and withholds income taxes (ISR).
• Social security & housing: Registration with IMSS and INFONAVIT is mandatory for employees; contributions are calculated on the Integrated Daily Salary (SDI).
• Statutory benefits (examples): Aguinaldo (year‑end bonus) of at least 15 days; paid vacation with the 2023 reform starting at 12 days in year one and increasing with seniority; vacation premium of at least 25% of vacation pay; profit sharing (PTU) subject to statutory caps; public holidays per federal calendar.
• Working time: Typical full‑time schedules are 40–48 hours/week depending on shift; overtime is regulated and paid at premium rates within caps.
• Termination: Terminations must follow just‑cause rules or pay severance per law. EOR manages calculations of accrued benefits and any statutory entitlements.
• Local payroll taxes: States levy payroll tax (impuesto sobre nóminas). Rates vary by state; the EOR calculates and remits as applicable.
• Data & IP: NDAs, invention assignment, and confidentiality clauses are common; ensure IP ownership is clearly assigned to your company.
Read More in Mexico Country Guide
Core statutory benefits & notes (Mexico)
| Benefit | Minimum / Rule | Notes |
| Aguinaldo (year‑end bonus) | ≥ 15 days’ salary | Due by Dec 20; prorated if not full year. |
| Paid vacation | Starts at ≥ 12 days (year 1) then increases | Per 2023 reform (“Vacaciones Dignas”). |
| Vacation premium | ≥ 25% of vacation pay | Often higher by market practice. |
| Profit sharing (PTU) | Mandatory; capped per statute | Shared based on days worked and wages. |
| Social security (IMSS) | Mandatory employer contributions | Covers health, disability, maternity, retirement. |
| INFONAVIT | Employer housing fund contribution | Based on integrated salary (SDI). |
| Holidays | Federal calendar | Regional observance may vary. |
| Overtime | Premium rates within legal caps | Must be tracked and paid properly. |
Hiring profiles and cost drivers in Mexico
Mexico offers deep talent pools for roles like software engineering, finance, customer support, design, and operations. Total cost varies by city/region, seniority, scarcity/market demand, and benefits mix. EOR services Mexico quote structures typically separate: (1) gross salary, (2) employer contributions & pass‑through taxes, and (3) the EOR provider fee (flat or %). We benchmark compensation locally and align with your budget to stay competitive.
Onboarding timeline & pricing models
Pricing: As an employer of record company in Mexico, we typically offer transparent pricing with a per‑employee monthly fee. Pass‑through employer contributions, taxes, and reimbursable benefits are billed at cost. Volume discounts may apply.
| Phase | Typical duration | What happens |
| Scoping & quote | 1–3 business days | Role review, compensation benchmarking, benefits design, pricing confirmation. |
| Offer & signing | 1–5 business days | Employment agreement drafted, bilingual summary, candidate signs. |
| Registration & setup | 3–10 business days | IMSS/INFONAVIT/SAT registrations, payroll setup, banking validations. |
| Go‑live payroll | Next payroll cycle | CFDI payroll issued, contributions and taxes remitted. |
Best practices & common mistakes
Best practices:
- Define employment scope upfront (duties, seniority, remote/onsite) to classify correctly and scope benefits.
- Benchmark compensation per city (e.g., CDMX, Guadalajara, Monterrey) to remain competitive.
- Document IP ownership and confidentiality in the Mexican employment agreement.
- Plan PTO and holiday schedules early; sync with local calendar to avoid coverage gaps.
- Use the EOR’s payroll calendar to set start dates that minimize proration and surprises.
- Align expense and equipment policies to avoid taxable fringe benefits.
Common mistakes:
- Treating long‑term, full‑time contributors as contractors—creates misclassification risk.
- Promising benefits not allowed under policy or not budgeted (e.g., excessive meal vouchers) without tax impact analysis.
- Overlooking state payroll tax or city‑specific compliance requirements.
- Assuming U.S. employment rules apply—Mexico has its own statutes and severance framework.
Why choose Serviap Global for Employer of Record in Mexico
As a LatAm‑first partner, Serviap Global combines on‑the‑ground expertise in Mexico with regional coverage across Latin America. We provide fast, compliant hiring, bilingual support, localized benefits, and a single point of contact for multi‑country growth. Our EOR provider Mexico model is built for transparency—so you always know what you pay and why.
Considering EOR Mexico for your first hire or an entire team? Talk to our specialists to review roles, compensation, and timelines. We’ll map the best path—EOR services Mexico today, your own entity tomorrow if and when it makes sense.
FAQ’s: Employer of Record in Mexico
What is an Employer of Record in Mexico?
An Employer of Record in Mexico is a local company that becomes the employee’s legal employer, while you direct day‑to‑day work. The EOR signs contracts, runs payroll with CFDI, registers employees for IMSS and INFONAVIT, and handles compliance.
How fast can I hire through an Employer of Record in Mexico?
In many cases you can onboard in days after offer acceptance, assuming timely documentation. Registrations and bank validations may affect first‑payroll timing.
Do I need to open a Mexican entity to hire with EOR?
No. EOR services Mexico let you hire without entity. The EOR is the legal employer and handles all employer obligations.
What benefits are mandatory in Mexico?
Key statutory items include social security (IMSS), INFONAVIT housing fund, aguinaldo (≥ 15 days), paid vacation (≥ 12 days year one, increasing with seniority), vacation premium (≥ 25%), profit sharing (PTU), and public holidays.
Can I convert Employer of Record in Mexico employees to my own entity later?
Yes. When you incorporate, employees can transition from the EOR to your entity with continuity, following local legal procedures.
What are typical Employer of Record in Mexico costs?
Total cost includes gross salary, employer contributions and taxes (pass‑through), plus the EOR fee (flat or percentage). State payroll tax varies by location.
Is using contractors safer or cheaper than Employer of Record in Mexico?
Contractors fit short, project‑based work. If the role is ongoing, supervised, and exclusive, an employment relationship likely exists—EOR reduces misclassification risk.
How are terminations handled under Employer of Record in Mexico?
EOR manages compliant offboarding. For no‑cause terminations, statutory severance rules apply. For cause, documentation and due process are critical.
Can I offer equity or bonuses to Mexican employees through EOR?
Yes, you can structure bonuses and equity plans; we’ll assess tax and payroll treatment to ensure proper withholding and reporting.
Which cities are best for hiring in Mexico?
Mexico City, Guadalajara, Monterrey, and emerging hubs like Mérida and Querétaro offer strong talent pools. Location affects compensation and payroll taxes.
Don’t Forget…
Payroll cadence, taxes & payslips
Monthly payroll is common in Mexico, although bi‑weekly (quincenal) is also used. Employers must issue digital tax receipts (CFDI) for payroll, withhold income tax (ISR), and calculate social security based on the Integrated Daily Wage (SDI) that includes base salary and certain benefits. State payroll tax (ISN) is assessed on remuneration and paid to each state where employees work. An EOR automates these calculations and filings.
Immigration & work authorization
When hiring non‑Mexican talent, the typical path is a Temporary Resident visa with work authorization sponsored by the Mexican employer. Processing times vary by consulate and case. An EOR can sponsor eligible roles, prepare invitation letters, and coordinate appointments with the National Institute of Migration (INM). Plan additional time for document legalization/apostilles and translations.
Regional nuances across states
Labor law is federal, but payroll tax (ISN), local holidays, and some administrative procedures differ by state. Mexico City and northern border states often have distinct tax rates or incentives. If your team is distributed, budget ISN by headcount per state and align holiday calendars accordingly.
Data protection & HR documentation
Mexico’s data protection framework (LFPDPPP) requires transparent handling of personal data through privacy notices and safeguards. Use compliant onboarding checklists, keep signed acknowledgements of internal policies (e.g., code of conduct, telework policy), and document equipment delivery for audits.
Sample role profiles commonly hired via EOR
Customer Support (English/Spanish), AR/AP Analysts, Collections Specialists, Inside Sales, SDRs, Marketing Ops, Graphic Designers, QA Analysts, Frontend/Backend Engineers, DevOps, and Finance Controllers are frequently onboarded through EOR arrangements in Mexico. We benchmark compensation by city and seniority to keep offers competitive.
