Mexico · Hiring guide
Mexico Hiring guide
Nearshoring is hot, next to the US market; but dismissal is very costly (without cause: 3 months + 20 days/year + seniority premium), aguinaldo/PTU are mandatory, and IMSS is employer ~25%. Calculate the dismissal liability before hiring.
What it costs
what one hire really costsNearshoring is hot and the US market is next door — but price the exit before you hire: unjust dismissal is very expensive (constitutional 90 days + 20 days/yr if reinstatement is refused + 12 days/yr seniority premium + accruals). With mandatory aguinaldo and PTU, the all-in cost is high.
How hard
can you get in and out?- nearshoring boom, next to the US
- IMSS etc. ~25% employer
- mandatory 15-day aguinaldo + PTU profit-sharing
- unjust dismissal: 90 days + 20 days/yr (if no reinstatement)
- seniority premium 12 days/yr + accruals
- Article 47 just cause needed to avoid payout
- Just causes listed in Art 47 (fraud, violence, consecutive absence, gross negligence, etc.) allow "for-cause dismissal", paying only the settlement.
- Without those = dismissal without cause, owing the large statutory severance.
- The dismissal reason must be given in writing, or the procedure is unlawful.
- 1.For-cause needs evidence + written notice; without cause is computed as unjustified dismissal.
- 2.Compute and pay: 90 days’ integrated daily wage + 20 days/year (if refusing reinstatement) + seniority premium 12 days/year + settlement.
- 3.Sign a "finiquito/settlement" for the record; the employee can sue the labor court for reinstatement or compensation.
- 4.Process the IMSS exit registration.
Dismissal without cause = 90 days (3 months) of integrated daily wage (incl. pro-rated bonuses/allowances) + 20 days/year of service (if refusing reinstatement) + seniority premium 12 days/year (daily wage capped at 2× minimum wage) + settlement (aguinaldo/unused leave/prima).
Example: Wage MXN 15,000, 4 years: 3 months ≈ MXN 45,000 + seniority premium 12 days/year × 4 + settlement; without-cause dismissal often totals several months’ wages, accruing yearly.
- Dismissal liability accrues yearly: hiring builds future severance cost, so dismissing long-tenured staff is very expensive.
- Aguinaldo (December) + PTU (profit-sharing) are mandatory cash flows — budget ahead.
- No written just cause / procedural defects draw higher labor-court awards (even reinstatement + back pay).
Source: Constitución Art 123 · Ley Federal del Trabajo Art 47–50
Supporting detail
How to start
first stepsWhat bites you
what others got wrong- Dismissal liability accrues yearly: hiring builds future severance cost, so dismissing long-tenured staff is very expensive.
- Aguinaldo (December) + PTU (profit-sharing) are mandatory cash flows — budget ahead.
- No written just cause / procedural defects draw higher labor-court awards (even reinstatement + back pay).
FAQ
What’s the all-in employer cost of one hire in Mexico?
For a local employee on MX$15,000/month, employer monthly cost is about MX$18,825 (overhead +25.5%), ~MX$233,400 annualized. Use the calculator for your actual wage.
How are employer social contributions paid in Mexico?
Employer IMSS + INFONAVIT 5% + SAR 2% + payroll tax ~25%; PTU 10%
How much is severance for dismissal in Mexico?
Without cause: constitutional 90 days (3 months) of integrated daily wage + 20 days/year (if refusing reinstatement) + seniority premium 12 days/year + settlement (aguinaldo/leave). Only an Art 47 just cause avoids the large severance.
What are Aguinaldo / PTU in Mexico?
Aguinaldo = statutory 13th, ≥15 days’ wage, paid by Dec 20; PTU = 10% of pre-tax profit shared with employees. Both are mandatory.
Deeply researched and verified against official bodies, auto-updated; rates and processes are for reference — for major decisions rely on each country’s authorities and local counsel.