|Payroll Frequency||Payroll cycle can be weekly, bi-weekly, semi-monthly (15 days) or monthly.|
|VAT||16% standard rate|
Employer of record Services
TopSource offers complete payroll, EOR and contractor management services for Mexico. TopSource provides Employer of Record services to global companies establishing a presence in Mexico that do not wish to be burdened with the complications of Mexico employment regulations.
TopSource serves as an outsourced Global Employment Solutions provider. We provide comprehensive employment services such as payroll, payroll related compliances, leave and attendance administration, HR management, and assistance with employer compliances.
If you have an established presence in Mexico, our payroll bureau services are available. But if you are seeking to avoid the complications of a subsidiary—or wish to establish a presence quickly an convert to a subsidiary later—our EOR service is ready to support you today.
Services we offer
|• Payroll bureau solutions for your Mexico entity|
|• Employment solutions/leasing||• Providing documents associated with employment|
|• Employee on-boarding process and documentation||• Monthly salary calculation|
|• Salary disbursement to employee’s account||• Pay slip generation (If applicable)|
|• Employee statutory benefits administration and deduction|
|• Foreign exchange and money transfer services for payment of employees and 3rd parties|
Company formation in Mexico
We can help with company registration, company incorporation along with all the necessary documentation in Mexico. We can also assist foreign companies to smoothly setup a company anywhere in Mexico.
- Minimum Wage
Hourly wage is 123.22 MXN
Employer Payroll Tax 5.25% – Sickness & Maternity 1.75% – Disability & Death 2.00% – Retirement 1.75% – Layoff and Retirement Benefits 1.00% – Child Care 0.50% – 3.00% – Work Related Accidents 5.00% – Housing Tax 0.50% – 3.00% – Payroll State Tax up to 22.75% – Total Employment Cost Employee Payroll Taxes 5.25% – Sickness & Maternity 1.75% – Disability & Death 3.15% – Layoff and Retirement Benefits 10.15% – Total Employee Cost Employee Income Tax 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
General Working Hours8 hours per day and 40 work hours per week is a full time, standard work week.
13th SalaryPaying 13th and 14th salaries is the common practice.
Maternity LeaveMothers are entitled to up to 3 months paid by social security at a 100% rate of the salary.
Paternity Leave/Parental LeaveFathers are entitled to 1 week paid by the employer at 100% rate of the salary.
There is no statutory parental leave in Mexico.
OvertimeWhen earning minimum wage an employee can work up to an extra 9 hours per week totally exempt from extra overtime pay but up to 9 hours more than that and employers will have to pay them at a rate of 200% and then for every hour after that the employee will need to be paid at a rate of 300%.
Employees that earn more than the minimum wage are exempt for only 50% of the overtime worked per week up to 5 minimum wages per week. The first 9 hours will be paid at a rate of 200% and the following hours will be paid at a rate of 300%.
Paid Time Off/Public HolidaysMandatory Vacations:
1 year seniority = 6 days
2 years seniority = 8 days
3 years seniority = 10 days
4 years seniority = 12 days
5 to 9 years seniority = 14 days
10 years or above – additional 2 days per 5 years.
No Carryover policy
7 days + 1 additional day every 6 years
Severance PayIf an employee voluntarily resigns then the employer is expected to pay the employee all the benefits that are outstanding. When an employee has been employed by the same company for 15years or more then the employer is expected to pay 12 days’ salary for every year they were employed.
Termination with cause: The employee is entitled to all benefits that are outstanding plus 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 Labour Board’s decision.
Termination Process/Probation PeriodNo mandatory process is required, however formalization of the termination before the conciliation and arbitration court is suggested.
Probation Period- Optional but the common practice is 3 months’ probation.
Notice Period- No advance notice needed.