Mexico HR Information

Updated on: 2025/08/04 14:03 (UTC)

Overview

The Mexican Constitution of 1917 covers various employment-related issues, including work hours, the minimum wage, discrimination, workplace health and safety and unions. The principal law covering the workplace is the Federal Labor Law, which addresses in detail these and many other employment issues.

In 2017, Mexico’s Labor Department established an online system to allow employers to self-report their compliance with labor laws regulating working conditions, training, and health and safety. Employers that choose to use the voluntary system will receive a receipt identifying their compliance or noncompliance with these laws.

Employers found to be in compliance will be exempt from regular inspection visits for a year. However, employers that contribute a false report can be subject to extraordinary inspection visits and possible sanctions.

Hiring

Employment Contracts

All employees must receive a written contract. While the contract can be written in Spanish and another language, the Spanish version will prevail if a conflict arises.

Employment contracts must contain the following:

• name, nationality, gender, marital status and address of the worker and employer;
• duration of the employment relationship;
• type of work to be provided;
• place or places where the work is to be performed;
• daily hours of work;
• amount of wages and payment conditions;
• statement that the worker will be trained according to the plans and programs established by the company or by law and
• rest days, vacation leave and other conditions agreed to by the worker and the employer.

Mexican law has traditionally provided for three types of employment relationships: employment for an indefinite term (which is presumed), employment for a defined term, and employment for a specific job. The 2012 Federal Labor Law revisions added three concepts employers may consider when hiring new employees: trial periods, initial training periods and seasonal work.

Trial Period: Employment for an indefinite term or employment for a defined term over 180 days may now include a trial period. The employee must agree to the trial period, and there must be a written employment contract reflecting this agreement. The trial period can be for a maximum 30 days and may be extended to 180 days in certain cases.

Initial Training Period: The law also introduces an initial training period that allows an employer to provide training to assist a new employee in acquiring the skills and knowledge necessary to perform a particular job. The employee must agree to the initial training period, and it must be included in the employment agreement. Generally, an employee’s initial training period may not exceed three months. For directors, employees in general management positions with broad administrative responsibilities, and employees performing technical and professional activities, the initial training period may last as long as six months.

The trial period and initial training period cannot be combined. Following the trial period or the initial training period, the employer may terminate an employee without having to pay severance if it determines the individual does not have the skills necessary to perform the job.

Seasonal Work: Employment for an indefinite term may now include discontinuous work when the services required are for fixed and periodic tasks of a discontinuous nature, involve seasonal activities, or do not require the provision of services throughout the entire week, month or year. Under this arrangement, the employment relationship can be suspended during off periods. The new provision allows workers to gain seniority even if their service with an employer is not continuous. Seasonal employees are entitled to the same types of benefits as other employees performing similar jobs in the company, in proportion to the time worked.

Temporary Workers: The amended Federal Labor Law establishes a legal framework for the use of contract workers. When work is outsourced, a third-party contractor performs tasks or provides services for the benefit of the contracting party. This work must fulfill the following terms and conditions:

• it may not cover all the activities carried out in the workplace,
• it must be justified as a specialized job and
• it may not include tasks equal or similar to those carried out by other employees of the contracting party.

It is important for employers to monitor how authorities interpret this new provision of the law. At present, some analysts believe that running afoul of the law in even one of the areas listed above could cause the contracting party to be considered a co-employer of the contractor’s workers and cause the company to pay associated labor liabilities, including salaries, benefits and social security obligations.

On January 11, 2021, Mexico amended the Federal Labor Law’s requirements governing remote work. Under the amendment, remote workers are defined as those who spend more than 40 percent of their time working from home or at another location designated by the employee. Employers need to obtain employees’ consent prior to modifying their work conditions and must formalize remote work through a written contract. Within 18 months of the amendment’s enactment date, the Ministry of Labor must issue health and safety standards pertaining to remote work.

Restrictions on Hiring

Employers are prohibited from hiring youths under age 15. Employment of anyone over the age of 15 and under 18 requires parental permission.

Employees under 18 cannot work overtime, on Sundays and holidays, after 10:00 p.m. or in hazardous occupations and must undergo a medical examination certifying their fitness for work. Employers must maintain a registry of all minors employed. Mexico also prohibits the import of goods or services made with forced and child labor.

At least 90 percent of a company’s workers must be Mexican nationals. If no qualified Mexican workers can be found in a particular specialty, foreign workers may be employed, but they must not make up more than 10 percent of the workers in that specialty. The employer and foreign workers with specialized skills are required to jointly train Mexican workers. The 10 percent rule does not apply to directors, administrators, or general managers.

Recordkeeping

Employers are required to provide the Ministry of Labor with a current record of:

• employees enrolled in training programs and the job skills they possess,
• employees under the age of 18 and
• new hires receiving orientation or training in the company.

Employers also need to maintain records regarding all social security benefits paid to workers.

Background Checks

Background checks are not addressed in the Federal Labor Law.

Noncompetition Agreements

Mexican law does not expressly prohibit covenants not to compete.

Disclosure by an employee of trade secrets or other confidential information that harms the employer’s competitive position constitutes just cause for termination, even in the absence of a noncompete agreement.

The validity of noncompetition agreements intended to survive an individual’s employment relationship is questionable. Post-employment restrictions should be narrow in scope, limit the duration of the covenant, define the type of competitive activities from which the former employee is to refrain and specify the competitors from which and the geographic area or market segment within which the former worker cannot accept employment. Employers generally make a payment to the former worker in exchange for the commitment not to engage in direct competition.

Reference Citations

Employment Contracts: Federal Labor Law, 1970, arts. 24-26, 35-40 (Spanish)

Restrictions on Hiring: Federal Labor Law, 1970, arts. 7, 22-23, 189, 216, 246 (Spanish)

Recordkeeping: Federal Labor Law, 1970, art. 153-A, 180 (Spanish)

Immigration and Work Permits

In General

Foreign nationals who will be paid a salary by a Mexican company must request authorization from the immigration service, which will send the proper form to the Mexican consulate in the foreign national’s home country. The Mexican consulate will then issue a Multiple Immigration Form (FMM). Once in Mexico, the foreign national must request that the FMM be changed to a temporary residence permit and that work authorization be granted. Temporary residents may stay in Mexico for as long as four years.

Visas and Work Permits

U.S. citizens need only a passport or passport card to enter Mexico. Passport cards can be used only to enter and depart Mexico at the land border, but passports are required for air travel. Citizens of a number of countries outside the U.S. and the European Union are required to obtain a visa at the Mexican embassy or consulate in their home country.

At least 90 percent of a company’s workers must be Mexican nationals. If no qualified Mexican workers can be found in a particular specialty, foreign workers may be employed, but they must not make up more than 10 percent of the workers in that specialty. The employer and foreign workers with specialized skills are required to jointly train Mexican workers. The 10 percent rule does not apply to directors, administrators or general managers.

There is a single visa form for tourist and business visitors, valid for 30 days upon entry with no fee. This form, called an FMM (Multiple Immigration Form), is normally distributed on aircraft arriving from the United States. Visitors are cautioned to keep the FMM in a safe place, as it must be turned in upon departure.

The type of visa required to work in Mexico depends on whether the foreign national will be paid by a Mexican company.

An FMM does not allow a foreign visitor to be paid by a Mexican company. Business travelers must be able to show that they will be paid by a company in their home country.

Foreign nationals who will be paid a salary by a Mexican company may request a visitor visa from Mexico’s National Immigration Institute, which will send an authorization to the Mexican consulate in the foreign national’s home country. The foreign national will then be given a 180-day visa with authorization to receive remuneration.

Foreign nationals who will be paid a salary by a Mexican company must request authorization from the immigration service, which will send the proper form to the Mexican consulate in the foreign national’s home country. The Mexican consulate will then issue an FMM. Once in Mexico, the foreign national must request that the FMM be changed to a temporary residence permit. Temporary residents may stay in Mexico for as long as four years.

Digital Nomad Visa. Professionals seeking to work remotely in Mexico for a company that does not have a presence in the country can apply for a temporary permit. The permit is valid for an initial period of one year and can be renewed for an additional three years. Temporary permit holders may apply for a permanent resident permit if they have continuously resided in the country for four years.

Post-Entry Requirements

Post-entry requirements depend on a visitor’s country of origin and the intent of the stay in Mexico.

Citizens and legal residents of the U.S., EU member states and other countries who do not need a visa to enter Mexico must obtain a 180-day FMM at the port of entry.

Foreign nationals who will be paid a salary by a Mexican company will receive an FMM in their country of origin, so they do not need to obtain one when they enter Mexico.

Foreign nationals who want to stay in Mexico for a period exceeding 180 days must ask the INM office to change the FMM visa to a temporary residence permit. Foreign nationals who are in Mexico on a temporary residence permit that does not allow remuneration may request a work authorization from the nearest INM office in Mexico.

Penalties

Companies that employ individuals who are not legally authorized to work in Mexico can be fined by labor or immigration authorities.

Reference Citations

Visas and Work Permits: Federal Labor Law, 1970, arts. 7, 189, 216, 246 (Spanish)

Nondiscrimination

In General

Employers may not discriminate against employees or prospective employees on the basis of race, ethnic or national origin, sex, age, small size, disability, social or economic status, health condition, pregnancy, language, religion, opinion, sexual orientation, marital status or any other category of discrimination that contradicts human dignity. Equal wages must be paid for equal work. Harassment, including sexual harassment, which is defined as a form of violence, is prohibited. The law includes acts of harassment as just cause for termination.

Gender Discrimination

The Federal Labor Law prohibits discrimination on the basis of gender and sexual harassment, which is defined as the abuse of power in a relationship of real subordination that puts the victim at risk. The law includes acts of harassment as just cause for termination. A mechanism to prevent, treat and punish harassment in the workplace was adopted in 2013.

The Federal Labor Law prohibits employers from requiring that current or potential employees provide certification that they are not pregnant.

Reference Citations

Nondiscrimination: Federal Labor Law, 1970, art. 3 (Spanish)

Gender Discrimination: Federal Labor Law, 1970, arts. 3, 133 (Spanish)

Employee Privacy

Employee Data

Under the Federal Law on the Protection of Personal Data Held by Private Parties, there must be a lawful basis, such as consent or legal obligation, for collecting, processing, using and disclosing personally identifiable information. Companies handling personal data must notify the affected employees. If a security breach occurs, those affected must be notified promptly.

In 2013, the Federal Institute of Access to Information and Protection of Data released mandatory guidelines implementing the privacy law. The guidelines require that employers notify employees of the reasons for the collection of any personal information, obtain their consent before collecting or processing the data, and notify them of their right to access and if necessary correct collected data, the so-called ARCO rights (to access, rectify, cancel, and/or challenge collected data).

Employers do not need to gain employee consent in cases where the data processing is required to fulfill an employment contract, administer an employment relationship, or carry out a legitimate interest of the employer. Employers may transfer personal data outside of Mexico provided that the employees have been informed or have provided consent, and that reasonable steps have been taken to safeguard the personal data to be transferred.

Employee Monitoring and Surveillance

Employers seeking to monitor employees using audiovisual tools must give employees notice that they will be videotaped, who will be in charge of their personal data, and how the data will be used.

Reference Citations

Employee Data: Federal Law on the Protection of Personal Data Held by Private Parties, 2010, arts. 6, 8

Employee Monitoring and Surveillance: Regulation on the Law Protecting Personal Data, 2011 (Spanish)

Compensation

Hours of Work

The maximum work week is 48 hours. The work week comprises six working days, but the distribution of hours can be agreed so that employees have all, or part of, Saturday and Sunday as regular days off.

The labor law establishes the following maximum weekly work shifts:

• eight hours per day shift between 6 a.m. and 8 p.m. (equivalent to 48 hours per week);
• seven hours per night shift between 8 p.m. and 6 a.m. (equivalent to 42 hours per week); and
• seven-and-a-half-hours per mixed shift divided between the day and night shifts (equivalent to 42 hours per week).

Employees are guaranteed one fully paid day of rest for each six days of work. Employees required to work on their rest day are paid triple their wages for that day. Employees are also entitled to a rest break of at least 30 minutes each work day.

Minimum Wage

Effective Jan. 1, 2024, the national standard daily minimum wage is Mex$248.93. Effective Jan. 1, 2023, the national standard daily minimum wage was Mex$207.44. Mexico’s national standard minimum wage is applicable to most of the country and a higher minimum wage is in effect for the Northern Border Free Zone (Zona Libre de la Frontera Norte, abbreviated as ZLFN).

The Northern Border Free Zone’s boundaries are detailed in a map released by the National Minimum Wage Commission. The zone includes the entirety of the state of Baja California and northern parts of the states of Chihuahua, Coahuila, Nuevo Leon, Sonora, and Tamaulipas. Separate minimum wages that cover 59 professions and that are higher than the national standard daily minimum wage are established at least once per year by the National Minimum Wage Commission.

Minimum wage requirements are governed by Mexican law even if an employment contract was signed outside of Mexico.

Overtime

The workday can be extended under extraordinary circumstances, never exceeding three hours a day or three times a week. Workers are paid twice their regular hourly wage for the first nine hours of overtime in a week, three times their regular wage thereafter.

Workers under 16 years of age are not permitted to engage in overtime work.

Employees who work on Sunday receive their regular wages plus an additional 25 percent. Employees required to work on their rest day are paid triple their wages for that day.

Wage Payment

Manual laborers must be paid at least weekly. Other workers must be paid at least once every two weeks.

Permissible deductions are severely limited.

The Federal Labor Law allows deductions from wages for items such as:

• payment of debts to the employer, although this must be by agreement between the employer and the employee;
• lease payments for employer-provided housing;
• payments to the government for housing loans and credits;
• fees agreed to by workers to establish and promote cooperatives and savings banks;
• alimony payments to a spouse or other family member;
• union dues and
• payment of debts to company stores.

Workers’ wages cannot be seized except in cases involving alimony.

Workers cannot be fined by their employers for any reason.

Mandatory Bonuses

By Dec. 20 of each year, employers are required to pay all employees a Christmas bonus equivalent to 15 days’ regular wages. Employees who have worked less than one year receive a prorated bonus.

Under the Federal Labor Law, workers are entitled to a share of their employer’s profits, the percentage subject to change by the government. Executive officers and general managers may not participate in this program. The profits to be shared must be divided into two equal parts:

• part one must be shared equally among all the workers based on the number of days worked by each worker during the year and
• part two must be distributed in proportion to the total remuneration earned for the work performed during the year.

Reference Citations

Hours of Work: Federal Labor Law, 1970, arts. 60 - 73 (Spanish)

Overtime: Federal Labor Law, 1970, arts. 67 - 68 (Spanish); Constitution of Mexico, art. 123

Wage Payment: Federal Labor Law, 1970, art. 132 (Spanish)

Mandatory Bonuses: Federal Labor Law, 1970, arts. 87, 117-127 (Spanish)

Benefits

Vacation

Effective Jan. 1, 2023, employees in Mexico with more than one year of service are entitled to at least 12 days of vacation per year. Starting in the sixth year, the vacation period will increase by two days for every five years of service.

Holidays

Mexico observes the following eight national holidays:

• Jan. 1: New Year’s Day
• First Monday in February: Constitution Day
• Third Monday in March: Benito Juarez Day
• May 1: International Labor Day
• Sept. 16: Independence Day
• Third Monday in November: Revolution Day
• Dec. 1 every six years (2024, 2030, etc.): Presidential Inauguration Day
• Dec. 25: Christmas Day

Many businesses and labor contracts observe additional days for religious and national celebrations, but employees are not entitled to these days off with pay. Employees required to work on a national holiday are paid triple their wages for that day.

When a public holiday falls on a Sunday, Monday is given off as a day in lieu; if a public holiday falls on Saturday, Friday is given off.

Maternity Leave

Pregnant employees are entitled to paid maternity leave for 42 days (six weeks) prior to giving birth and 42 days (six weeks) after at 100 percent of regular salary. The postpartum leave can be extended by two weeks if the baby has a disability or requires hospitalization. Women may transfer as many as four of the weeks before the baby’s due date to postpartum leave.

In case of adoption, female employees are entitled to six weeks’ leave following receipt of the child. The Mexican Social Security Institute (IMSS) finances maternity leave for workers.

When an employee returns to work after maternity leave, she is entitled to two half-hour rest periods a day to feed her baby. Breast-feeding mothers are entitled to the same rest periods to express milk. Employers can fulfill this obligation by reducing the shifts of eligible female workers by one hour each day.

Paternity Leave

Male employees are eligible for up to five days of paid leave for the birth or adoption of a child.

Sick Leave

Employees unable to work because of a non work-related injury or illness and who have made payments into the social security system for the four weeks before the condition developed are eligible for paid sick leave through the Social Security Institute. The benefit, which is 60 percent of an employee’s regular wage, is paid from the fourth day of the illness for up to 52 weeks and may be extended for another 52 weeks.

Other Leave

Child Care Leave. Working parents are entitled to paid leave to care for children under the age of 16 who have been diagnosed with cancer. Employees must first receive a certificate from the Mexican Institute of Social Security (IMSS) that they must provide to their employer attesting to the oncological condition and duration of treatment. The certificates are valid for up to 28 days and can be issued as often as needed within a period of three years. However, the employee’s leave cannot exceed 364 days in total. The leave can be granted to either the father or mother, but not to both parents at the same time.

Revocation of Mandate Leave. Employees are entitled to unpaid leave to vote in the “revocation of mandate” process. The revocation of mandate is a referendum that allows voters to recall or reiterate support for the President of the Republic.

Pensions and Social Security

The legal retirement age in Mexico is 65, 60 with reduced benefits.

Mexico’s social insurance system is the Mexican Institute of Social Security, IMSS. Since 1997, all private-sector employees and cooperative members entering the workforce have been required to establish an individual account with the IMSS. Those covered by the social insurance system before 1997 can choose to receive benefits from the social insurance system or the mandatory individual account system.

Workers’ Compensation

Employers are required to register workers with the Institute of Social Security and pay premiums to the agency, which provides benefits for work-related illnesses and injuries.

Workers who suffer a work-related illness or injury are entitled to medical care, including hospitalization, surgery, medications, prosthetic or orthotic devices and rehabilitation, as well as pensions and indemnities.

Reference Citations

Vacation: Federal Labor Law, 1970, arts. 76 - 79 (Spanish)

Holidays: Federal Labor Law, 1970, arts. 74 - 75 (Spanish)

Maternity Leave: Federal Labor Law, 1970, arts. 166 - 170 (Spanish)

Paternity Leave: Federal Labor Law, 1970, art. 132, para. XXVII (Spanish)

Sick Leave: Social Security Law, 1995, arts. 58, 91-92, 98 (Spanish)

Workers’ Compensation: Social Security Law, 1995, arts. 58, 91-92 (Spanish)

Labor Relations

In General

The constitution and the Federal Labor Law grant both workers and employers the right to organize. The maximum duration of a collective bargaining agreement is two years.

Right to Organize

Unions can be established without prior authorization, although the law requires that they be registered with the government. A union can be established with at least 20 workers in active service or by the association of at least three employers. The law recognizes several types of worker unions, including those that are profession-based, company-based, industry-based or national-industry-based and those composed of various workers in various industries formed where there are not enough people in a locality of the same profession to form a union. The Federal Labor Law states that no one may be forced to join or not to join a union.

On Nov. 23, 2018, Mexico ratified an International Labor Organization (ILO) convention known as the Convention Concerning the Application of the Principles of the Right to Organize and to Bargain Collectively. Under this Convention, workers are protected from actions aimed at:

• making their employment subject to the condition that they not join a union or renounce membership to a union, and
• dismissing or prejudicing them on the basis of their union membership or participation in union-related activities while off-duty or during work hours.

Dispute Resolution

In Mexico, there is a preference for direct settlement of labor disputes between the parties, for conciliation through the intervention of a specialized authority, and for settlement by the courts. Mediation and binding arbitration are less widely practiced. The revised Federal Labor Law includes new procedures for handling labor disputes. Parties may now submit testimony of up to five witnesses per disputed fact, although the Conciliation and Arbitration Board is not required to hear the testimony of more than three witnesses. Another change in the revised Labor Law requires information submitted to the Conciliation and Arbitration Boards to be made public.

Strikes and Lockouts

Although the constitution establishes the right of registered unions to strike, very few strikes actually occur in Mexico. A union must give the Federal Labor Conciliation and Arbitration Board six days’ advance notice of its intention to strike, 10 days if a public services provider is involved. The board will then hold a conciliation hearing in an attempt to settle the dispute. Within 72 hours of a suspension of work, an employer or other party can ask the board to determine whether the strike is legal. If the strike is ruled illegal, employees have 24 hours to return to work or face termination. If the strike is ruled legal, management can neither enter the premises nor hire replacements. All operations must stop until the strike is resolved.

Successorship Clauses

Under the Federal Labor Law, the sale of an employer’s business does not change the employment relationships of workers.

Reference Citations

Right to Organize: Federal Labor Law, 1970, arts. 24- 26, 357 - 360 (Spanish)

Works Councils: Federal Labor Law, 1970, arts. 22 - 23 (Spanish)

Dispute Resolution: Federal Labor Law, 1970, arts. 685 - 697 (Spanish)

Strikes and Lockouts: Federal Labor Law, 1970, arts. 440 - 469, 921 -932 (Spanish)

Successorship Clauses: Federal Labor Law, 1970, art. 41 (Spanish)

Safety, Health and Security

In General

Under the Federal Labor Law, the employer is responsible for health and safety and for the prevention of risks in the workplace.

Workplace Safety and Health

Under the Federal Labor Law, employers must keep first aid medications and medical supplies at the workplace and instruct personnel on how to administer them. Employers with more than 100 employees must establish an infirmary with appropriate staff and those with more than 300 workers must establish a hospital with adequate medical and auxiliary personnel, although with employee agreement these services can be provided through local medical facilities.

Employers must provide pregnant employees with safe, less strenuous working conditions when necessary to protect the pregnancy.

Drug and Alcohol Use

Employees are prohibited from reporting to work when they are intoxicated or under the influence of a narcotic drug.

Reference Citations

Workplace Safety and Health: Federal Labor Law, 1970, art. 504 (Spanish)

Drug and Alcohol Use: Federal Labor Law, 1970, art. 47-XIII (Spanish)

Termination

Termination by Employer

The Federal Labor Law sets out specific behavior that can form the basis of dismissal for just cause.

These include:

• misrepresentation of qualifications for a job,
• dishonesty at work,
• threats or acts of violence at work,
• intentional damage to an employer’s property,
• serious damage to an employer’s property through negligence,
• compromising the safety of the workplace,
• immoral acts (including harassment or sexual harassment) at work,
• revealing the employer’s trade secrets or other confidential information,
• absence from work more than three times in a 30-day period without permission or cause,
• insubordination,
• failure to follow safety procedures,
• coming to work drunk or under the influence of nonprescription drugs and
• being sentenced to prison.

Workers who have 20 years or more with an employer may be dismissed only for conduct that is egregious or recurrent.

If a worker is not notified in writing of the cause for dismissal, the dismissal is considered unjustified.

Failure to dismiss an employee within one month of the event that provided cause for dismissal will invalidate the dismissal. Workers must seek a remedy within two months following the dismissal or the right of redress expires.

A worker can challenge a dismissal before the local Conciliation and Arbitration Board, asking either for reinstatement or compensation equal to three months’ salary, pay for back wages from the date of dismissal to the date of the award, 20 days’ pay for every complete year of service and a seniority premium equal to 12 days’ pay for every year of service.

Plant Closings and Mass Layoffs

The Federal Labor Law regulates reductions in force due to force majeure, bankruptcy or the introduction of machinery or new production processes.

In cases involving force majeure or bankruptcy, the company must inform the local Conciliation and Arbitration Board and provide workers with three months’ wages plus a length-of-service premium of 12 days’ pay for each year of service.

In cases of reductions in force due to modernization, the preference is for a joint labor-management solution. Should this fail, the employer must obtain authorization from the local Conciliation and Arbitration Board to execute its layoff plan. Workers who lose their jobs have the right to compensation equivalent to four months’ wages plus an additional 20 days’ wages for every year of service and a seniority premium or an amount agreed upon with the union in a collective agreement, whichever is larger.

Payment on Termination

Payment on termination varies depending on the reason for the termination.

• Employees dismissed for cause are entitled to all wages earned and benefits accrued.
• Employees dismissed without cause must be paid three months’ salary, 20 days’ pay for every year of service with the employer and a seniority premium equal to 12 days’ pay for every year of service, in addition to all wages earned and benefits accrued.
• Employees who resign must be compensated for unused vacation and paid a prorated portion of the Christmas bonus. If the employee has worked for the employer for 15 or more years, the employee is entitled to an additional sum equivalent to 12 days’ salary for each year of service.
• An employee who suffers a non work-related disability that precludes him or her from working is entitled to a severance payment of one month’s salary plus 12 days’ salary for each year of service.

Unemployment Insurance

Unemployed individuals who have contributed to the social insurance plan have the option to withdraw money form their accrued pension savings.

Reference Citations

Termination by Employer: Federal Labor Law, 1970, arts. 47-53, 161-162 (Spanish)

Plant Closings and Mass Layoffs: Federal Labor Law, 1970, arts. 50, 54, 434-439 (Spanish)

Payment on Termination: Federal Labor Law, 1970, arts. 5, 50, 54, 162, 436 (Spanish)

Personal Taxes

Residency Requirements

An individual who has a home in Mexico, earns half his or her income from Mexican sources and whose professional activities are principally in Mexico is considered a resident for tax purposes.

Taxable Income

Tax residents are taxed on their worldwide income, nonresidents on their Mexican-source income alone.

Tax Rates

BMexico’s federal income tax rates are levied on a progressive scale, with rates for residents ranging from 1.92 percent to 35 percent and rates for nonresidents ranging from zero to 30 percent.

Social taxes in Mexico include numerous social security taxes administered by the Mexican Institute of Social Security (Instituto Mexicano de Seguro Social, IMSS) and a housing fund assessment administered by the Mexican Institute of the National Housing Fund for Workers (INFONAVIT).

Social Security consists of an occupational risk fund to finance compensation for workplace illnesses or injuries; an illness and maternity fund; a disability and life insurance fund; a retirement, elderly unemployment, and aging fund; a retirement pension fund; and a day-care services and social benefits fund.

Reference Citations

Residency Requirements: Mexico Tax Authority (Spanish)

Taxable Income: Mexico Tax Authority (Spanish)

Tax Rates: Mexico Tax Authority (Spanish)

References

In English unless otherwise noted.

Law and Regulation

Constitution of the United Mexican States

Federal Labor Law (Spanish)

Federal Law on the Protection of Personal Data Held by Private Parties (Spanish)

Federal Law to Prevent and Eliminate Discrimination (Spanish)

Government Websites and Publications

Institute of Immigration (Spanish)

Secretariat of Labor and Social Welfare (Spanish)

Social Security Institute (Spanish)