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.
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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.
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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 expertMexico
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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 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.
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.
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.
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.
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.
How our Mexican payroll service works
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.
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.
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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.
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Mexican payroll FAQs
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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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