---
title: "Mexico"
id: "16987"
type: "global-payroll"
slug: "mexico"
published_at: "2025-09-23T07:40:17+00:00"
modified_at: "2026-09-22T14:13:04+00:00"
url: "https://topsourceworldwide.com/global-payroll/mexico/"
markdown_url: "https://topsourceworldwide.com/global-payroll/mexico.md"
taxonomy_continent:
  - "North America"
---

# Payroll Services in Mexico

Fully managed Mexican payroll – IMSS and INFONAVIT at the 2026 rates, ISR withheld and a CFDI issued for every payment, aguinaldo and state payroll tax handled, with a named specialist a phone call away.

[Get in touch](https://topsourceworldwide.com/contact-us/)

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[Read reviews](#testimonials)

## What Mexican payroll actually involves

Mexican payroll combines federal social security, a housing fund, a state payroll tax and statutory benefits paid on top of salary. Every payment needs an electronic payslip stamped with the tax authority.

### About 30% on top of salary

IMSS and INFONAVIT contributions, state payroll tax, the aguinaldo and the vacation premium together add roughly 30% to a mid-range salary.

### Contributions rise every year to 2030

The employer’s old-age contribution is climbing each January under the 2020 pension reform. In 2026 it runs from 3.150% to 7.513% depending on salary.

### A CFDI for every payment

Each salary payment must be backed by an electronic payroll receipt, a CFDI, stamped through the SAT. Payslips and tax reporting both depend on it.

### Statutory pay beyond salary

Employees are owed an aguinaldo of at least 15 days’ pay by 20 December, a 25% vacation premium and a share of 10% of taxable profits.

### A shorter working week is coming

The maximum working week falls from 48 hours to 46 in 2027 and reaches 40 in 2030, with electronic time records required from 2027.

## Our Partners Globally

## Calculate Your Employee Costs in Mexico

Enter a gross annual salary to see an estimate of the employer cost of a Mexican employee: IMSS contributions at the 2026 rates for salaries above four UMA, 5% INFONAVIT and a 3% state payroll tax. It does not include the aguinaldo, vacation premium or profit sharing, which are paid to the employee on top of salary.

##### Employment Cost Calculator

*Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us)

##### Mexico

  Annually Monthly

|  | British Pound | Mexico |
| --- | --- | --- |
| Base Salary (per month) |  |  |
| Employer Contributions |  |  |
| Total Cost (Annual) |  |  |
| Total Cost (Monthly) |  |  |

Employer of Record services in [Learn more](#)
Payroll Outsourcing in [Learn more](#)

## Know your Mexican hiring costs before you commit

Tell us the role and the gross salary – we’ll send back the full Mexican employer cost, IMSS, INFONAVIT, state tax and statutory benefits included, within one business day.

[Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/)

> “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.”

Director of Research Operations,

> “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.”

Chief Human Resources Officer,

> “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.”

Senior Manager, Human Resources ,

## Employer Costs in Mexico Explained

On a salary of MXN 30,000 a month, a Mexican employee costs about 32% on top of base pay: 23.7% in IMSS and INFONAVIT contributions, 4.9% for the aguinaldo and vacation premium, and 3% state payroll tax in most states, 4% in Mexico City. The old-age contribution rises every year until 2030, and profit sharing is paid on top where the company makes a taxable profit. Here’s the breakdown.

#### IMSS contributions and the 2020 pension reform

IMSS contributions are calculated on the integrated daily salary, the SBC, which adds the aguinaldo, vacation premium and most regular benefits to base pay, capped at 25 UMA, MXN 2,932.75 a day in 2026. The employer pays a fixed health quota of 20.40% of the UMA per day, 1.10% on the part of the SBC above three UMA, 0.70% cash benefits, 1.05% pensioners’ medical expenses, 1.75% disability and life, 1.00% childcare, 2.00% retirement and a work-risk premium set per company, starting at 0.54355% for low-risk activities.

The employer’s old-age and severance contribution is the one that keeps moving. Under the pension reform published in December 2020 it rises every January until 2030, and in 2026 it runs from 3.150% for employees on the minimum wage to 7.513% for salaries above four UMA. Employees pay about 2.8% in total, and for workers on the minimum wage the employer pays their share as well.

#### INFONAVIT and state payroll tax

The employer pays 5% of the SBC, up to the same ceiling, to INFONAVIT, the workers’ housing fund, together with the retirement and old-age contributions every two months. Where an employee has an INFONAVIT mortgage, the employer must also deduct the repayments from pay.

Each state levies its own payroll tax on total pay, usually between 2% and 3%. Mexico City raised its rate from 3% to 4% from January 2025, with reductions for micro and small businesses. The tax is paid monthly to the state where the employee works.

#### What a Mexican employee actually costs

On a salary of MXN 30,000 a month, IMSS and INFONAVIT come to about MXN 7,112 a month, the aguinaldo and vacation premium accrue at about MXN 1,480 a month and a 3% state payroll tax adds about MXN 944, for a total of about MXN 9,537, or 31.8% on top of base salary.

The minimum wage is MXN 315.04 a day in 2026, or MXN 440.87 in the Northern Border Free Zone. The aguinaldo of at least 15 days’ salary must be paid by 20 December. Employees get 12 days of paid vacation after their first year, rising by two days a year to 20 and then by two days every five years, with a vacation premium of at least 25%. Companies with taxable profit must share 10% of it with employees, capped at three months’ salary or the average of the last three years.

#### ISR withholding, the CFDI and filing dates

The employer withholds income tax, ISR, from each payment using the SAT tariff, with a top rate of 35%, and applies the employment subsidy for low earners. Every payment must be backed by a CFDI payroll receipt stamped through the SAT, which is also how the tax authority sees what was paid.

ISR withheld and the monthly IMSS contributions are due by the 17th of the following month. Retirement, old-age and INFONAVIT contributions are paid every two months, also by the 17th of the month after each two-month period. Employees are registered with IMSS before they start work.

IMSS registration needs a Mexican tax ID and an employer registration, so foreign companies without a Mexican entity usually hire through an Employer of Record. Running payroll for your own Mexican entity is an administrative service, not subcontracting of personnel, so the 2021 outsourcing reform does not restrict it.

#### Working hours, notice and termination

The maximum working week is 48 hours today. A reform published on 3 March 2026 reduces it to 46 hours in 2027, 44 in 2028, 42 in 2029 and 40 from 2030, without any cut in pay, and requires employers to keep electronic records of working time from 2027. Overtime is paid at double time for the first nine hours a week and triple time beyond.

Mexico has no statutory notice period. An employee dismissed without justified cause is entitled to three months’ salary, 20 days’ salary per year of service where reinstatement is refused, a seniority premium of 12 days per year capped at twice the minimum wage, and all accrued benefits.

## Mexican employer social security contributions, 2026

| Contribution | Employer | Employee | Applies to |
| --- | --- | --- | --- |
| Health, fixed quota | 20.40% of the UMA | — | Per day worked |
| Health, above three UMA | 1.10% | 0.40% | SBC above MXN 351.93 a day |
| Cash benefits and pensioners’ medical | 1.75% | 0.625% | SBC up to 25 UMA |
| Disability and life | 1.75% | 0.625% | Same ceiling |
| Childcare and retirement | 3.00% | — | Same ceiling |
| Old-age and severance | 3.150% to 7.513% | 1.125% | Rate rises with salary and every year to 2030 |
| Work risk | From 0.54355% | — | Set per company by risk class |
| INFONAVIT | 5% | — | SBC up to 25 UMA, paid every two months |

### Payroll filing and payment dates

| Obligation | Due | Note |
| --- | --- | --- |
| ISR withheld | By the 17th | Of the following month |
| IMSS monthly contributions | By the 17th | Of the following month |
| Retirement, old-age and INFONAVIT | By the 17th | After each two-month period |
| State payroll tax | Monthly | Usually 2% to 3%; 4% in Mexico City |
| CFDI payroll receipt | Every payment | Stamped through the SAT |

### Key Mexican payroll amounts and entitlements, 2026

| Item | Amount | Note |
| --- | --- | --- |
| Minimum wage | MXN 315.04 a day | MXN 440.87 in the Northern Border Free Zone |
| UMA | MXN 117.31 a day | Reference for contribution floors and ceilings |
| Aguinaldo | At least 15 days’ salary | Paid by 20 December |
| Vacation | 12 days after the first year | Plus a vacation premium of at least 25% |
| Maximum working week | 48 hours | 46 in 2027, falling to 40 in 2030 |

Employer and employee rates for 2026 on the integrated daily salary (SBC), capped at 25 UMA. The fixed health quota is 20.40% of the UMA per day regardless of salary. State payroll tax and profit sharing are not shown.

Rates, thresholds and statutory amounts shown are for 2026 and were verified on 21 September 2026. The minimum wage changes every January, the UMA every February and the old-age contribution every January until 2030. This page is general information, not tax or legal advice.

[Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/)

## How our Mexican payroll service works

1. Map your setup

We confirm your IMSS employer registration and work-risk class, your SAT registration, INFONAVIT obligations and the states where your employees work, then go through salaries, benefits, pay frequency and profit-sharing history.

2. Migrate or onboard

New employees are registered with IMSS before they start, with the integrated daily salary calculated correctly. Year-to-date pay, ISR and accrued vacation are carried across so the first payroll is right.

3. Run and review

Each period you receive a payroll report for approval before anything is paid: gross to net per employee, ISR, IMSS, INFONAVIT and state payroll tax, with variances explained. Nothing is stamped, paid or filed until you approve it.

4. File and pay

We stamp a CFDI for every payment, pay ISR and monthly IMSS by the 17th, and pay retirement, old-age and INFONAVIT contributions every two months, with the aguinaldo and profit sharing run on their statutory dates.

5. Stay current

Mexican payroll resets every January and the working week starts shrinking in 2027. We apply new minimum wages, UMA values and contribution rates, and re-verify the figures on this page.

## Why TopSource for Mexican Payroll

TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option.

We don’t hide fees or sneak price increases. We run Mexican payroll in-house and file under your own IMSS and SAT registrations rather than a bureau’s, so the same team that files your returns answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions, taxes and fees, and one live Portico view of Mexico beside every other country we run for you. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified.

[Global Payroll](https://topsourceworldwide.com/global-payroll/)
[Get Started](https://topsourceworldwide.com/contact-us/)

## Other services Accelerating your growth in Mexico and beyond

#### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment.

### Global Employer of Record (EOR) services

With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion.

### Actionable HR Advisory

On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking.

### Global entity management

Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business.

### Accounting

We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction.

## Meet our experts for Mexico

Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way.

[Our People](https://topsourceworldwide.com/our-people/)

## Beyond a payroll service **A globalization accelerator**

A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth.

- [Payroll platform](#)
- [Audit](#)
- [Intelligence](#)
- [Advisory](#)

##### Payroll platform

###### Global payroll simplified

Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity.

##### Audit

###### Eliminate barriers to growth

Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals.

##### Intelligence

###### Build a data-driven talent strategy

Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits.

##### Advisory

###### Expert guidance that turns complexity into clarity.

Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion.

## Mexican payroll FAQs

### How much does an employee cost in Mexico?

On a salary of MXN 30,000 a month the employer cost is about 32% on top of base pay: 23.7% in IMSS and INFONAVIT contributions, 4.9% for the aguinaldo and vacation premium, and 3% state payroll tax in most states. Profit sharing is paid on top where the company makes a taxable profit.

### Can a US company pay employees in Mexico without an entity?

IMSS registration requires a Mexican tax ID and an employer registration, so a foreign company without a Mexican entity usually hires through an Employer of Record. Once you have an entity, TopSource can run its payroll, or employ your team through our Employer of Record service until then.

### What is the minimum wage in Mexico in 2026?

The minimum wage is MXN 315.04 a day from 1 January 2026, and MXN 440.87 a day in the Northern Border Free Zone. For employees on the minimum wage, the employer also pays the employee’s share of IMSS contributions.

### What are the employer IMSS rates in 2026?

The employer pays a fixed health quota of 20.40% of the UMA per day, plus percentages of the integrated daily salary for health, disability and life, childcare, retirement, work risk and old-age insurance. The old-age rate runs from 3.150% to 7.513% in 2026 and rises every year until 2030. INFONAVIT adds 5%.

### When are payroll taxes due in Mexico?

ISR withheld from salaries and the monthly IMSS contributions are due by the 17th of the following month. Retirement, old-age and INFONAVIT contributions are paid every two months, by the 17th of the month after each period. State payroll tax is usually paid monthly.

### What is the aguinaldo in Mexico?

The aguinaldo is a mandatory year-end bonus of at least 15 days’ salary, paid by 20 December. Employees who worked only part of the year receive a proportional amount. It is part of the integrated salary used for IMSS contributions.

### How much vacation do employees get in Mexico?

Since 2023 employees get 12 days of paid vacation after their first year, rising by two days each year to 20 days in year five, then by two days every five years. The employer pays a vacation premium of at least 25% of the salary for those days.

### Is Mexico reducing the working week to 40 hours?

Yes. A reform published on 3 March 2026 lowers the maximum working week from 48 hours to 46 in 2027, 44 in 2028, 42 in 2029 and 40 from 2030, without reducing pay. Employers must keep electronic records of working time from 2027.

### What is PTU profit sharing in Mexico?

Companies must share 10% of their taxable profit with employees each year, normally paid in May. Each employee’s share is capped at three months’ salary or the average of what they received over the last three years, whichever is higher.

### What is the state payroll tax in Mexico?

Each state charges a tax on total payroll, usually between 2% and 3% of salaries and benefits. Mexico City charges 4% since January 2025. The tax is paid monthly to the state where the employee works.

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[Mali Capital: Bamako Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/mali/)

[Malta Capital: Valletta Currency: Euro](https://topsourceworldwide.com/global-payroll/malta/)

[Mauritania Capital: Nouakchott Currency: Mauritanian Ouguiya](https://topsourceworldwide.com/global-payroll/mauritania/)

[Mauritius Capital: Port Louis Currency: Mauritian Rupee](https://topsourceworldwide.com/global-payroll/mauritius/)

[Monaco Capital: Monaco Currency: Euro](https://topsourceworldwide.com/global-payroll/monaco/)

[Mongolia Capital: Ulaanbaatar Currency: Tögrög](https://topsourceworldwide.com/global-payroll/mongolia/)

[Montenegro Capital: Podgorica Currency: Euro](https://topsourceworldwide.com/global-payroll/montenegro/)

[Morocco Capital: Rabat Currency: Moroccan Dirham](https://topsourceworldwide.com/global-payroll/morocco/)

[Mozambique Capital: Maputo Currency: Mozambique metical](https://topsourceworldwide.com/global-payroll/mozambique/)

[Namibia Capital: Windhoek Currency: Namibian Dollar](https://topsourceworldwide.com/global-payroll/namibia/)

[Nepal Capital: Kathmandu Currency: Rupee](https://topsourceworldwide.com/global-payroll/nepal/)

[New Zealand Capital: Wellington Currency: New Zealand Dollar](https://topsourceworldwide.com/global-payroll/new-zealand/)

[Nicaragua Capital: Managua Currency: Nicaraguan córdoba](https://topsourceworldwide.com/global-payroll/nicaragua/)

[Nigeria Capital: Abuja Currency: Nigerian Naira](https://topsourceworldwide.com/global-payroll/nigeria/)

[Norway Capital: Oslo Currency: Norwegian krone](https://topsourceworldwide.com/global-payroll/norway/)

[Oman Capital: Muscat Currency: Rial](https://topsourceworldwide.com/global-payroll/oman/)

[Pakistan Capital: Islamabad Currency: Pakistani Rupee](https://topsourceworldwide.com/global-payroll/pakistan/)

[Panama Capital: Panama City Currency: Balboa (PAB) and United States dollar (USD)](https://topsourceworldwide.com/global-payroll/panama/)

[Papua New Guinea Capital: Port Moresby Currency: Papua New Guinean Kina](https://topsourceworldwide.com/global-payroll/papua-new-guinea/)

[Paraguay Capital: Asunción Currency: Paraguayan guaraní](https://topsourceworldwide.com/global-payroll/paraguay/)

[Peru Capital: Lima Currency: Peruvian sol](https://topsourceworldwide.com/global-payroll/peru/)

[Philippines Capital: Manila Currency: Peso](https://topsourceworldwide.com/global-payroll/philippines/)

[Portugal Capital: Lisbon Currency: Euro](https://topsourceworldwide.com/global-payroll/portugal/)

[Puerto Rico Capital: San Juan Currency: United States dollar](https://topsourceworldwide.com/global-payroll/puerto-rico/)

[Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/global-payroll/qatar/)

[Romania Capital: Bucharest Currency: Romanian Leu](https://topsourceworldwide.com/global-payroll/romania/)

[Rwanda Capital: Kigali Currency: Rwandan franc](https://topsourceworldwide.com/global-payroll/rwanda/)

[Saint Kitts & Nevis Capital: Basseterre Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-kitts-nevis/)

[Saint Lucia Capital: Castries Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-lucia/)

[Saint Maarten Capital: Philipsburg Currency: Netherlands Antillean guilder (ƒ)](https://topsourceworldwide.com/global-payroll/st-maarten/)

[Saint Vincent & the Grenadines Capital: Kingstown Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-vincent-the-grenadines/)

[Saipan Capital: Capitol Hill Currency: U.S. Dollar](https://topsourceworldwide.com/global-payroll/saipan/)

[San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/global-payroll/san-marino/)

[Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/global-payroll/saudi-arabia/)

[Senegal Capital: Dakar Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/senegal/)

[Serbia Capital: Belgrade Currency: Serbian dinar](https://topsourceworldwide.com/global-payroll/serbia/)

[Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/global-payroll/seychelles/)

[Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/global-payroll/slovakia/)

[Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/global-payroll/slovenia/)

[Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/global-payroll/solomon-island/)

[South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/global-payroll/south-korea/)

[South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/global-payroll/south-sudan/)

[Sri Lanka Capital: Colombo Currency: Sri Lankan Rupee](https://topsourceworldwide.com/global-payroll/sri-lanka/)

[Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/global-payroll/sudan/)

[Sweden Capital: Stockholm Currency: Swedish krona](https://topsourceworldwide.com/global-payroll/sweden/)

[Taiwan Capital: Taiwan Currency: Dollar](https://topsourceworldwide.com/global-payroll/taiwan/)

[Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/global-payroll/thailand/)

[Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago dollar](https://topsourceworldwide.com/global-payroll/trinidad-tobago/)

[Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/global-payroll/tunisia/)

[Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/global-payroll/uganda/)

[US Virgin Island Capital: Charlotte Amalie Currency: Dollar](https://topsourceworldwide.com/global-payroll/us-virgin-island/)

[Venezuela Capital: Caracas Currency: Venezuelan bolívar](https://topsourceworldwide.com/global-payroll/venezuela/)

[Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/global-payroll/zambia/)

[Zimbabwe Capital: Harare Currency: Zimbabwean Dollar](https://topsourceworldwide.com/global-payroll/zimbabwe/)

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