Hiring in Mexico: costs, rules and the best EOR providers

Mexico prohibits subcontracting personnel under Article 12 of the Federal Labour Law. An EOR label does not create an exception. Specialised services can qualify under Article 13 only when they fall outside the beneficiary’s corporate purpose and predominant economic activity, with the required registration and contract.

If the proposed hire is simply supplied to perform the client’s core work, do not assume ordinary EOR staffing is permitted.

A provider supplying personnel for qualifying specialised services needs REPSE registration covering the actual service. Registration alone does not make prohibited personnel outsourcing lawful.

Confirm the employing company, registered activity, current status and written service scope; these must match the work performed. If the arrangement fails the specialised-service test, an active REPSE entry does not cure that failure.

PTU is statutory profit sharing, generally a pool of 10% of the employer’s relevant taxable profit, subject to legal exemptions and employee eligibility.

Eligible EOR employees are not excluded merely because the service is called EOR. The individual cap is the more favourable of three months’ salary or the applicable average participation from the previous three years. It is not automatically a flat 10% surcharge on each salary.

Add employer IMSS contributions, INFONAVIT and statutory cash benefits to the gross salary. INFONAVIT is normally 5% of the integrated contribution salary; aguinaldo is at least fifteen days’ salary for a full year, with prorating where applicable.

IMSS is not one universal percentage: insurance branches, assessment bases, ceilings and occupational risk affect it. Keep employee payroll deductions separate from employer costs.

The amount depends on the termination route. For an unjustified dismissal, the employee can seek reinstatement or the applicable three-month compensation, alongside accrued entitlements and relevant seniority premium.

Twenty days per year is not an automatic addition to every exit: it applies in the statutory circumstances. The EOR must identify the legal ground, salary basis and procedure before presenting a settlement total.

The Vacaciones Dignas reform raised the first full year’s paid annual leave to twelve days. It increases by two days per year to twenty, then by two days for each further five-year service block.

The vacation premium is at least 25% of the pay for the leave period. Eligible EOR employees receive the same statutory entitlement; an EOR service contract cannot reduce it.

Yes. The constitutional reform published on 3 March 2026 establishes a phased reduction, including eligible employees hired through an EOR. The published timetable moves to 46 weekly hours in 2027, 44 in 2028, 42 in 2029 and 40 in 2030.

It does not make every 2026 working week forty hours immediately. Plan staffing and contracts for the phased limits without reducing protected pay and benefits.

The seniority premium is generally twelve days’ salary for each year of qualifying service, using the statutory wage limit. Voluntary resignation normally requires fifteen years’ service; dismissal has different eligibility rules and does not impose that same fifteen-year minimum.

The calculation is capped at twice the applicable minimum wage where the employee earns more. It is separate from accrued benefits and any unjustified-dismissal compensation.

An EOR does not guarantee that a US company avoids a Mexican permanent establishment. The assessment concerns the company’s actual activities, fixed places of business and people acting for it, together with treaty eligibility and the US–Mexico treaty.

An employee’s contract with a third party does not answer those tests. Review the role’s commercial authority and operating arrangements before relying on an EOR for a Mexican expansion.