COUNTRY GUIDE
A short guide to building a dedicated offshore team in Mexico
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Mexico City
Spanish
128.45 million
GMT-5 to GMT-7
700,000+
Mexican Peso (MXN)
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$12.54B
$2.16B+
Mexico City
Spanish
128.45 million
GMT-5 to GMT-7
700,000+
Mexican Peso (MXN)
$12.54B
$2.16B+
Mexico, located in North America, is quickly becoming a major player in the global IT industry. By placing a strong focus on technological education, Mexico produces an impressive 130,000 engineering graduates each year, solidifying its position in the tech world.
Mexico City, as the nation's technological hub, is a bustling center of innovation, tech events, and emerging startups, attracting talented individuals specializing in AI, software development, and digital design.
The IT industry in Mexico is valued in the billions and has a compound annual growth rate (CAGR) of 10.6% for 2023-2028, driven by the increasing number of tech enterprises and international partnerships. With over 700,000 developers, Mexico is establishing itself as a noteworthy IT service provider on the global stage.
Mexico's extensive English proficiency, growing tech workforce, and strategic proximity to the U.S. make it one of the prime tech hotspots in the Americas. Businesses searching for unparalleled software development expertise can benefit from Mexico's cost-competitive environment and relentless commitment to tech evolution.
Payroll Cycle
Employees in Mexico can be compensated on a weekly, bi-weekly, or monthly basis, but this frequency must be specified in their employment contract. Bank transfers are the recommended method for payment as cash transactions face strict regulations. Electronically issued payslips, known as CFDIs, are mandatory. Moreover, payroll documentation in Mexico needs to be retained for a duration of 5 years.
Employer Taxes
36.1 – 44.73%
Overtime Pay
Overtime work beyond the standard shift is compensated as per the terms set in the employment contract or collective agreements. Employees can work up to 3 overtime hours daily, but not for more than 3 consecutive days. Some managerial positions may be exempt from overtime pay and its restrictions.
Overtime compensation is governed by two primary factors: the cumulative number of overtime hours in a week and the number of hours worked post a regular shift on a given day.
Paid Leave
In Mexico, the employment contract stipulates that employees receive a minimum of 12 days of paid holiday annually. After completing a year of service, they are entitled to an additional two days of holiday each year. Once an employee reaches 5 years of service, they earn two more days every five years, as illustrated in the subsequent table. If leave remains unused, it can be carried forward for up to 6 months.
Additionally, for each day of vacation taken, employees should receive a 25% bonus on their daily wage as a vacation premium.
Sick Leave
Compensation for sick leave is provided by Social Security (IMSS). Qualified employees can receive up to 52 weeks of sick leave, paid at 60% of their standard wage, upon verification by medical authorities affiliated with IMSS. In cases of work-related injuries, the employee receives full compensation, amounting to 100% of their regular salary.
Public and Provincial Holidays
There are 7 public holidays in Mexico
Notice Period
While Mexico doesn't have a set statutory minimum notice period, federal labor regulations require companies to give written notice to the employee within 30 days once they become aware of any misconduct. This notice must specify the reasons for dismissal. If not provided, the labor board is responsible for issuing a termination notification. Typically, a courtesy notice of two weeks is extended in situations of 'termination without cause' or when an employee resigns.
13th Month Bonus
In Mexico, employers are required to pay a 13th-month salary, known as Aguinaldo, which must be disbursed by December 20th. The Aguinaldo is determined based on 15 workdays of pay, factored over a 365-day year, with an additional allowance included.
Setting up an independent business operation in Mexico for the purpose of team building can be an intricate and financially demanding endeavor, frequently accompanied by considerable legal costs.
Delving into the complexities of Mexican labor laws and aligning with employee expectations necessitates navigating through a dense array of challenging and detailed hurdles. This challenge is further amplified by the requirement to obtain precise and contemporary employment information for Mexico. Additionally, the process of managing contracts and overseeing invoices through emails and spreadsheets is susceptible to disorganization and inaccuracies.
In this context, compliance becomes imperative, demanding strict adherence to Mexican regulations, especially with regards to taxes and legal stipulations.
ALLSTARSIT simplifies this intricate process by offering a comprehensive solution for the identification and recruitment of employees in Mexico, overseeing HR and payroll, and ensuring compliance is seamlessly automated. Our service is designed to make the entire process smooth and uncomplicated, thereby facilitating efficient and streamlined operations.
Choose the right expert professionals required for your specific project, saving time and wasted effort.
This service enables software development companies worldwide to meet any technical needs outside their core skill set by adding specialized staff on demand while retaining control of the project's specifications and scope.
Establish R&D / Tech Support / QA & Testing / DevOps / Data Entry Centers in your chosen location.
Forget about investing in facilities, equipment, technology, or human resources. We manage all necessary operations as your specialist. This can help you save money and resources, all while reducing frustration and simplifying internal processes.
Use ALLSTARSIT as your EOR / CM to easily hire employees in new countries without setting up a legal entity.
We act as the employer for your new hire, handling all HR, payroll, tax, and compliance requirements on your behalf, while you maintain control of their workload.
Effortlessly Access Expert Tech Support for Your Projects
Our Tech Support service provides companies worldwide with access to the best technical experts tailored to their specific project needs. Whether you require troubleshooting, maintenance, or specialized assistance, we ensure that you have the right professionals on hand to support your endeavors effectively.
Maximize Your Customer Satisfaction Level with Our Customer Support Service
Access tailored customer care solutions for your business needs. Our expert team is dedicated to addressing inquiries, resolving issues, and delivering personalized assistance. Say goodbye to challenges and hello to exceptional customer care with us.
Contact us, and we’ll help you hire the best tech talent in Mexico
