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Public Holidays Calendar
Day | Date | Holiday | Notes |
---|---|---|---|
Saturday | Jan-1 | New Year's Day | |
Monday | Feb-7 | Constituition Day | |
Monday | Mar-21 | Benito Juarez | |
Friday | Apr-8 | Holy Thursday | Not an official day off but many companies will give this as holiday |
Saturday | Apr-9 | Holy Friday | Not an official day off but many companies will give this as holiday |
Sunday | May-1 | Labor Day | |
Thursday | May-5 | Anniversary of the Battle of Puebla | |
Friday | Sep-16 | Independence Day | |
Tuesday | Nov-1 | Day of the Dead | Not an official day off but many companies will give this as holiday |
Wednesday | Nov-2 | Day of the Dead | Not an official day off but many companies will give this as holiday |
Monday | Nov-21 | Mexican Revolution | |
Thursday | Dec-1 | Change of Government: Every 6 years | |
Sunday | Dec-25 | Christmas Day |
Papaya Offers Complete Payroll, PEO and Contractor Management Services For Mexico
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Employer
Employer Payroll Contributions
Employee
Employee Payroll Contributions
Employee Income Tax













Minimum Wage
General
The National minimum wage in Mexico is 172.87 MXN per day; however, this can differ by job role and category.
The Northern Border Zone has a different minimum wage, set at 260.34 MXN per day. The border zone is a defined set of Mexican state municipalities bordering the USA.






Payroll
Payroll Cycle
The payroll cycle is bi-weekly, and employees are generally paid on the 15th and the last day of each month.
13th Salary
A 13th-month salary payment is mandatory in Mexico; it is a bonus payment paid by December 20th (Aguinaldo). The Aguinaldo is calculated as 15 working days of salary, plus an allowance, based on a 365-day year.
Working Hours
General
The standard working hours within Mexico are 48 hours per week, 8 hours per day. However, there are three work shifts stated in Mexico federal labor law:
- Day shifts comprise 48 hours per week (between 6 am to 8 pm)
- Night shifts comprise 42 hours per week (between 8 pm to 6 am)
- Mixed shifts comprise 45 hours per week
The maximum weekly and daily working hours can differ as stipulated in employment contract /collective bargaining agreements.
Overtime
All work above the standard mandated shift is paid as overtime and regulated by the employment contract/collective agreements.
The payment of overtime is based on two considerations which determine whether overtime hours need to be paid at double or triple paid hours. These considerations are the total number of overtime hours worked during the working week and the number of hours worked during a single day after a regular shift.
The first nine overtime hours during the week are to be paid at 200.00% of the regular salary rate; every hour after that is to be paid at 300.00% of the regular salary rate. The first three hours after a normal shift are considered double hours; every hour after that is deemed to be triple regardless of the number of overtime hours worked during the week.
Leave
Paid Time Off
Paid leave in Mexico is outlined in the employment contract as a minimum of 6 days paid holiday per year, plus an additional two days per year of service, following completion of 1-year service. Following the completion of 4 years of service, two additional days are added every five years.







Public Holidays
8 public holidays.
Sick Days
Eligible employees are entitled to up to 52 weeks of paid sick leave at 60.00% of the regular salary when verified by IMSS affiliated medical authorities. If it is a work-related injury, the employee is entitled to 100.00% of the regular salary.
Maternity Leave
All female employees are entitled to 12 weeks of paid maternity leave, which the employee must take six weeks before the birth and six weeks after that. The maternity pay is calculated at full pay, where the IMSS contributes 60.00% of the cost and the employer 40.00%. The application for maternity leave must be supported by a medical certification issued by an IMSS approved clinic or a private medical institution.
Female employees are also entitled to six weeks of paid adoption leave after the child (a minor) is handed to them.







Paternity Leave
The father is entitled to mandatory paid paternity leave of 5 days.
Parental Leave
There is no additional Parental leave in Mexico.
Other Leave
There is no statutory additional leave in Mexico.
Termination
Termination Process
At-will employment does not exist in Mexico, and termination at-will clauses are only applicable to the employee. Therefore, employers may not terminate employment relationships without just cause. The Mexican Federal Labor Law stipulates a closed list of reasons and sets the procedure to terminate an employee at any time without incurring liability. The list of reasons can be found below:
- False statements about work qualifications.
- Breach to the disobedience or honesty principles.
- Vandalism.
- Sexual harassment.
- Alcoholism in the workplace.
- Revealing company secrets.
- Refusing to comply with safety procedures and
- four unexcused absences in 30 days.
Notice Period
There are no statutory minimum notice periods in Mexico; however, Federal Labour Law states that should the circumstance dictate, the company must provide the employee with notice in writing within 30 days of knowing about the misconduct. The written notice must explain the grounds for dismissal, or the Labor Board must issue a termination notice.
Severance Pay
In Mexico, terminating an employee without reasonable cause requires severance. The severance payment should comprise three times the regular monthly salary figure plus for those employees with more than 15 years’ service an additional 20 days’ pay for every year of service thereafter.
Probation Period
The probation period in Mexico for permanent employees is generally 90 days.
VISA
VISA
Any foreigners coming to work in Mexico will need to apply for a work permit and resident visa.
The National Institute of Immigration oversees all immigration in Mexico and issues work visas.
Mexico has a temporary and permanent visa; the employee should apply for both jointly with the prospective employer. A temporary resident visa is for foreign nationals who want to live in Mexico for more than 180 days. In addition to the Mexico work permit, people with a temporary resident visa can live and work in the country for up to four years with a Mexico work visa.
After completing four years’ service (with the same company), a foreigner may apply for a permanent resident visa.
VAT
General
The standard rate of VAT in Mexico is 16.00%.
Papaya Global offers full Mexico PEO services for companies not wishing to open a local entity
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Questions & Answers
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If a new mother wants to extend maternity leave beyond 3 months, does the government continue to pay her salary?
If a mother extends her maternity leave, the government will continue to pay at a rate of 50% for an additional 60 days.
Is it standard practice to grant a vacation bonus to employees? If so, what is the standard amount.
Hi Peter,
It is a common practice and a very strong expectation in Mexico that employees will receive a 25% bonus for at least 6 days of their vacation.
Can payroll payments to employees be made by a payment service provider on behalf of the employer?
Hi Matt, thank you for your question. In large, yes, it is possible.
Hi, We have a travel related business in Mexico and we have be shut down by the government due to unpaid Social Security for employees. We have been closed/struggling for 1 year due to Covid and no tourism and no income, but we have continued paying our employees with loans and credit cards. However, we owe 1 year of employee Social Security payments to the government. I was told that if we can not pay the past Social Security debt and ‘release’ our employees, that the employees will lose ALL their pension they’ve earned for the last 22 years they have worked for us. They will have no retirement monthly pension coming in from what we have paid toward their retirement. This doesn’t seem right. Is this false information?
Hi Patricia, this is out of the scope of things that we cover and do not offer legal advice. We recommend that you seek legal counsel in Mexico to understand how you as a company are liable.
Are employers required to provide health insurance in Mexico? Our company currently provides health insurance stipends to staff to purchase private health insurance plans. Is this common and/or allowed? If allowed, how is it taxed?
Hi, employers are not required to provide health insurance. If this is offered as an allowance, then it is treated as a salary component and is taxed as such with the regular payroll.
If employees incur business expenses on behalf of the company, can the employees receive reimbursement via the payroll company as a non-taxable element of their paycheck?
Employees can be reimbursed for expenses tax-free in Mexico as long as they provide a detailed electronic invoice (not a paper invoice) in the name of the company (not the employee) and the total is under a certain limit, usually 2,0000 MXN. It must be invoiced as an expense for the company, not a form of income for the employee. The electronic invoice should include the company’s name and tax ID number, the amount of the expense, the payment method, and date of the expense, and should in either PDF and XML format. The expense should be made by credit card or e-transfer.
In case of a dispute with the termination fee, who is responsible for covering it, me as a customer or Papaya? is there any kind of deposit? Thank you!
The customer/client is responsible for any termination cost and there is no deposit.