Article
9 min read
How to Hire Using an Employer of Record in Mexico (2025 Edition)
Employer of record
Author
Ellie Merryweather
Last Update
June 27, 2025
Table of Contents
What is a Mexico Employer of Record?
Top reasons to use an EOR in Mexico
How to hire in Mexico: Step-by-step guide
Employment compliance tasks an Employer of Record manages in Mexico
How much does an EOR in Mexico cost?
Which Mexico EOR service provider should you choose?
Is Deel Employer of Record a strong choice for hiring in Mexico?
Hire employees in Mexico confidently with Deel Employer of Record
Key takeaways
- Setting up a Mexican entity to hire local talent could take months and cost up to MX $88,4112, and take months. Using an Employer of Record (EOR) is faster, often more cost-effective, and helps mitigate costly compliance fines.
- A Mexican Employer of Record covers Instituto Mexicano del Seguro Social (IMSS) rules, contracts, and data protection under Mexican labor laws, ensuring full compliance without the headache.
- Deel EOR owns its Mexican entity for full control, supports hiring in 150+ countries, delivers transparent pricing, real-time compliance monitoring, and has top G2 ratings.
Hiring employees in Mexico opens doors to a large talent pool, competitive wages, and a growing economy. However, setting up a legal entity is time-consuming and involves navigating complex Mexican labor laws, Mexican tax requirements, social security contributions, and payroll regulations. Without expert help, you face legal risks, delays, and hidden costs before you even post a job.
An Employer of Record (EOR) in Mexico handles entity setup, payroll, and HR compliance on your behalf. You transfer employment liability while focusing on growing your business. Deel’s global reach across 150+ countries, combined with real-time compliance monitoring and transparent pricing, makes hiring in Mexico simple and secure.
Whether you want a wholly-owned Mexico entity or payroll-only support, an EOR like Deel streamlines workforce planning with AI insights, automates onboarding, and ensures you never miss a statutory filing.
What is a Mexico Employer of Record?
A Mexico Employer of Record is an organization that hires your talent in the country through its Mexican entity so that you can skip the long and costly incorporation process and onboard new employees fast and compliantly. The EOR signs employment contracts, withholds payroll taxes and social security contributions, and manages statutory filings according to Mexican labor laws.
This split between legal and operational responsibilities allows you to scale quickly without establishing a legal entity. When Mexican labor laws or tax withholding rules change, real-time alerts from Deel Compliance Hub keep you informed. With a wholly-owned entity in Mexico, Deel avoids local partnership risks and offers end-to-end compliance expertise.
By leveraging an Employer of Record service provider in Mexico, you sidestep the pain of entity setup, reduce the chance of fines for misclassification or late filings, and benefit from transparent pricing. Deel’s platform also integrates talent sourcing, background checks, and benefits management, so you can hire and pay employees compliantly across 120+ countries.
Top reasons to use an EOR in Mexico
Using an Employer of Record in Mexico gives you immediate access to local talent without the headaches of setting up a legal entity. You avoid navigating the Instituto Mexicano del Seguro Social (IMSS) rules, payroll tax filings, and labor court risks. Here are the top benefits:
- Faster market entry: Start hiring within days instead of months, avoiding time-consuming entity setup
- Compliance certainty: Automate social security contributions and payroll filings
- Risk mitigation: Transfer liabilities for termination, severance, and misclassification risks
- Scalable payroll: Run payroll for contractors and employees across 150+ countries on one platform
- Transparent pricing: Flat fees with no hidden markups on mandatory costs, including Mexican tax and social security
- Local entity ownership: Rely on a wholly-owned Mexico subsidiary to meet local labor court standards and Mexican labor laws
With Deel, you also get AI-driven workforce planning, compensation benchmarking, and global mobility support, so hiring employees in Mexico is both strategic and seamless.
Continuous Compliance™
How to hire in Mexico: Step-by-step guide
Use this 8-step checklist to onboard employees compliantly through a Mexico Employer of Record.
1. Choose an EOR with a wholly-owned Mexican entity
Select an EOR provider in Mexico that owns its Mexican entity to ensure compliance with the Mexican Tax Administration Service (SAT) and IMSS regulations. Deel’s wholly-owned entity guarantees compliance with Mexican labor laws and data protection.
Tip: Verify entity ownership through public registry information.
2. Book a demo and verify social proof
Request a demo to see payroll runs, contract templates, and compliance dashboards in action. Check case studies and client testimonials for EOR services in Mexico. Scan reviews on G2 and Trustpilot, where Deel EOR holds a 4.8/5 average.
Tip: Request a customer reference in your industry to confirm Mexican payroll accuracy and compliance.
Discover how Strada uses Deel to navigate the complex world of global payroll and hiring, all in one platform.
3. Request a transparent EOR quote
Obtain a detailed quote including gross salary, statutory social costs, income tax withholding, and the EOR’s flat fee. Deel’s transparent pricing avoids hidden markups on benefits or filings.
Tip: Compare costs before you expand—read our article EOR vs. Entity Costs: What’s More Affordable?
4. Submit a 12–24-month hiring plan
Provide your projected headcount and locations so the EOR can optimize payroll taxes, social contributions, and deadlines. This helps budget for statutory paid leave, sick pay, and parental leave entitlements.
Tip: Update your plan quarterly to reflect hiring or regulatory changes.
5. Create the employment contract in the platform
Use the EOR’s contract generator to draft agreements compliant with Mexican probation rules and notice periods. Deel’s templates auto-populate salary, employee benefits, and data protection clauses. Tip: Customize probation durations within legal limits for flexibility.
6. Confirm the candidate’s right to work
Verify work permits, work permit status before issuing an offer. Deel Immigration supports visa and work permit applications to speed up onboarding.
Tip: Store digital copies of work authorizations in the platform for audit readiness.
7. Run the onboarding workflow
With Deel EOR, every onboarding is adapted to local labor laws, supported by a dedicated onboarding manager. Within the platform, new hires can seamlessly verify identities and work-permit status, complete compliance documents and payroll information, and review and sign employment agreements.
Tip: Automate reminders for benefit opt-in deadlines to maximize employee satisfaction.
8. Maintain ongoing compliance
Leverage real-time alerts for changes in Mexican labor laws, payroll tax updates, and social security rates. Deel Compliance Hub tracks filings and flags discrepancies before they become issues.
Tip: Schedule monthly reviews with your EOR account manager to stay ahead of regulatory shifts.
Deel Employer of Record
Employment compliance tasks an Employer of Record manages in Mexico
Your EOR provider in Mexico takes care of key compliance tasks and keeps you updated on any regulatory changes in real-time.
| Category | Details |
|---|---|
| Statutory employer costs | Employer social security contributions range from 19.15% to 28.85%, covering health, retirement, and housing. Employer pension contribution is approximately 10%, with automatic enrolment at hire and a 30-day opt-out window. |
| Employment contracts & probation rules | Written employment statement must be provided within 5 days. Probation periods are allowed for up to 30 days, but do not apply to fixed-term contracts. Notice periods follow a matrix based on employee seniority. |
| Pay and working hours | Standard working hours are 8 per day, 48 hours per week maximum. Overtime beyond 8 hours/day must be paid at 100%–200%, going up to 300% for working public holidays. |
| Payroll compliance | Monthly RTI (income tax) filings required to SAT. Payroll systems must implement be aligned with la Ley Federal de Protección de Datos Personales en Posesión de los Particulares (LFPDPPP). |
| Vacation and public holiday allowances | Holiday entitlement depends on tenure, the minimum being 12 days per year. Vacation is usually accrued throughout the first year, but employees cannot take any days until their 1-year anniversary. |
| Income taxes | Covered under monthly RTI filings to SAT. Individual income tax is calculated according to progressive rates, and individuals are responsible for filing their own annual returns. |
| Expenses, allowances, and bonuses | Expenses are strictly regulated under the Reglamento de la Ley del Impuesto Sobre la Renta (RLISR). The Work From Home Allowance (MX $1,000 per month) is taxable and must be offered to all employees. Other allowances are offered at the employer’s discretion. |
| Maternity, paternity, parental, adoption & foster leave | Maternity leave is 84 days, with 100% of the employee’s salary funded by the Mexican Social Security (IMSS). Paternity leave is 5 days, with 100% of the employee’s regular salary funded by the employer. The employee can extend this leave, unpaid, at the employer’s discretion. |
| Sick leave, bereavement leave, and carer’s leave | Unlimited sick leave, all employees are eligible from their first day, and will be paid 100% of their salary. |
| Terminations and resignations | Dismissals must be based on fair grounds. For unjustified dismissal, severance includes 90 days’ salary + 20 days per year worked. Employers with 50+ employees must consult before collective dismissals. For a mutual termination agreement, an additional 1-3 months salary in exchange for release is common. |
| Health & safety | Working conditions must adhere to Estándares de Salud de la Industria en México. |
| Misclassification risk | Contractor misclassification rulings from 2021–2025 led to fines exceeding MXN 500,000. Using an EOR mitigates risk by formally owning the employment relationship. |
| Data protection & IP protection | Employers must comply with the Federal Law on Protection of Personal Data. No data localization is required. |
Discover how Deel helped Clara expand its business without increasing expenses
Clara was founded during the pandemic in a virtual and remote environment. From the beginning, they knew that talent isn’t tied to location, so they needed a solution to offer that same flexibility without so many complications. As they grew from their home country of Mexico to Brazil and Colombia, taking advantage of technology and the remote work boom became more urgent and tangible.
“With Deel, we can hire no matter where the people are, at the same time we're being budget conscious because the company grows but the costs remain the same."
-- Carolina Astaiza, Global People Director at Clara
How much does an EOR in Mexico cost?
Understanding the full cost of employment in Mexico helps you accurately forecast. You pay the employee’s gross salary plus employer social security contributions (19.15% to 28.85%) and an EOR service fee. Here’s how costs break down:
| Factor | Your own Mexico entity | Deel EOR |
|---|---|---|
| One-off costs | MX $88,4112 | MX $0 |
| Annual, recurring costs | MX $1,201,954 | MX $0 |
| Deel Employer of Record service fee | N/A | MX $136,920 / employee |
| Estimated total annual costs | MX $2,086,066 | MX $136,920 |
| Time to first hire | 4-5 months | 1-2 business days |
Deel’s flat-fee model means no hidden markups on mandatory costs. You get transparent pricing with forecasted budgets and AI-driven insights to optimize pay.
Which Mexico EOR service provider should you choose?
Choosing the best EOR services in Mexico hinges on three criteria:
1. Entity ownership
A wholly-owned Mexico subsidiary eliminates partner compliance gaps. Verify the EOR’s corporate registry status to ensure they directly assume liabilities.
2. Compliance expertise
Look for real-time updates on Mexican labor laws, automated RTI filings, and support for complex cases like collective bargaining or transfers. Deel’s Compliance Hub and Immigration services give you peace of mind by keeping you up to date on regulatory changes.
3. Platform breadth
A single platform for global payroll, contractor payments, background checks, and benefits management reduces vendor sprawl. Deel covers 150+ countries, offers device management with Deel IT, and mobile support for remote teams.
Is Deel Employer of Record a strong choice for hiring in Mexico?
Deel is a top choice for hiring in Mexico thanks to its wholly-owned Mexican entity, which ensures direct compliance and avoids partner risks. As a G2 leader with presence in 150+ countries, Deel offers transparent pricing and fast onboarding, so you can hire confidently without the pain of entity setup.
- Wholly-owned Mexico subsidiary guarantees local compliance and liability coverage
- Access to talent across 150+ countries on one global platform
- Transparent pricing with no hidden markups on mandatory social security
- Fast onboarding and contract generation within 5 days, including probation terms
- Automated payroll filings and real-time compliance monitoring with Deel Compliance Hub
- AI-driven workforce planning and compensation benchmarking for strategic hiring
- Support for statutory benefits: vacation, maternity/paternity leave, and severance rules
- Integrated visa, work permit, and mobility assistance via Deel Immigration
- Easy management of benefits, equity, and employee development on one platform
- Rated a G2 leader for user satisfaction and feature breadth
With Deel, you avoid lengthy entity setup delays and costly misclassification risks.
One of the things that we have solved since we have been remote and with the help of Deel has been the hiring of great talent without looking at where the person is located, without major legal complications, but based solely on the skills and capabilities of the candidates. That is, we can without any inconvenience search for talent around the world and make international hires without major complications. Deel has definitely been a great ally in this sense.
—Adriana Medina,
Vice President of Human Talent at Platzi
See how Platzi used Deel EOR to hire global talent across Mexico, Chile, Colombia, Spain, Canada, and the US.
Hire employees in Mexico confidently with Deel Employer of Record
Speed up your market entry by hiring in Mexico within days, not months, with Deel’s fully compliant EOR service. Deel handles all legal and payroll complexities, letting you focus on growing your team without setup headaches. And with our transparent pricing, you’ll get a clear breakdown of fees, including employer social security contributions and flat service charges—no surprises.
Ready to hire in Mexico quickly and compliantly? Schedule your Deel demo now and start scaling your workforce with confidence.
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FAQs
How long does onboarding take with Deel EOR in Mexico?
Typically, 5 days to generate contracts and complete registrations, accelerating your hiring timeline.
Do employees need a local bank account for payroll?
Yes, Mexican payroll requires a local bank account for salary deposits, which Deel helps set up.
What type of employment contracts are used?
Written contracts specifying role, salary, probation (up to 30 days), and statutory benefits are standard.
How does tax withholding work?
Deel ensures correct payroll tax withholdings and files monthly reports with Mexican tax authorities.
When is the payroll deadline?
Monthly payroll must be processed on time to meet SAT reporting deadlines; Deel automates this.
What benefits are mandatory?
Social security contributions (15%–25%), vacation days, maternity/paternity leave, Christmas bonus, and sick leave pay are covered.
How is probation handled?
Probation periods can last up to 30 days and must be explicitly stated in the employment contract.
Can Deel help with work permits and visas?
Yes, Deel Mobility supports visa and work permit applications for foreign hires.
Does Deel manage severance and termination compliance?
Absolutely, Deel handles all legal requirements related to termination and severance payments.
How does Deel ensure data protection compliance?
Deel complies with Mexico’s Federal Law on Protection of Personal Data and safeguards employee information globally.
About the author
Ellie Merryweather is a content marketing manager with a decade of experience in tech, leadership, startups, and the creative industries. A long-time remote worker, she's passionate about WFH productivity hacks and fostering company culture across globally distributed teams.
