As a trusted Employer of Record (EOR) in Mexico, we expertly manage all types of payroll systems to ensure full compliance with the Mexican Federal Labor Law (Ley Federal del Trabajo), tax regulations, and social security obligations. Our seamless payroll solutions eliminate the need for a legal entity, saving you time and reducing compliance risks.

We handle every aspect of payroll, including tax withholdings, IMSS contributions, and INFONAVIT payments, so your employees are paid accurately and on time. Below are the legally recognized payroll types we manage to meet your business needs:

Weekly Payroll

1. Common in industries like manufacturing or construction, where workers may prefer more frequent payments.

   1. Payments are typically made every 7 days.

   2. Suitable for roles with variable hours or daily-wage workers.

   3. Employers must ensure accurate tracking of overtime, which is paid at 200% of the regular rate for up to 9 hours weekly and 300% beyond that..

Bi weekly payroll

1. The most common payroll cycle in Mexico, with payments typically made on the 15th and last day of the month.

2. Widely used across industries for both salaried and hourly employees.

3. Aligns with the standard practice of bi-monthly salary disbursements.

Monthly Payroll

1. Used for salaried employees, particularly in professional or office-based roles.

2. Payments are typically made once a month, often at the end of the month.

3. Less common than bi-weekly but still legally compliant for stable, fixed-salary positions.

Key Considerations for Payroll in Mexico:

• Mandatory Employee Benefits: Payroll must include Aguinaldo (Christmas bonus, at least 15 days' pay), vacation premiums (min. 25%), and statutory profit sharing (PTU).

• Tax and Social Security Compliance (IMSS/INFONAVIT): Employers must calculate, withhold, and remit income tax (ISR) and social security contributions for health, housing, and retirement.

• Digital Tax Receipts (CFDI): Every salary payment must be accompanied by a Comprobante Fiscal Digital por Internet (CFDI), which acts as a legally valid pay stub.

• Registration Requirements: Companies must register with the SAT, IMSS, and INFONAVIT.

• Record Keeping: Payroll records, including contracts and tax deductions, must be retained for at least five years to comply with potential audits.

• Worker Classification: Strict regulations exist regarding independent contractors; misclassification can lead to heavy fines and legal liabilities.

• Outsourcing vs. EOR: While outsourcing is available for companies with a local entity, those without one must use an Employer of Record (EOR) to manage compliance.

• Payment Frequency: Typically, non-manual employees are paid monthly, while manual employees are paid weekly or bi-weekly.

Using specialized local payroll providers is often necessary to navigate these complex, frequently changing regulations.