Mexico combines nearshore time zones with a deep professional talent pool, and a labor system that was tightened sharply by the 2021 outsourcing reform. Employer costs are moderate, but profit-sharing and the reform's rules catch first-time employers out.
Employment is governed by the Federal Labor Law: written contracts, IMSS registration from day one, and no at-will termination. Since the 2021 reform, staffing-agency arrangements for core business are banned; you either employ people properly or work with a registered specialized provider. EOR through TGTC is the compliant path without an entity.
The employer burden lands around a third of gross salary once social security, housing, retirement, and state payroll taxes are combined.
The Aguinaldo is a legal minimum of 15 days' salary each December. Separately, PTU obliges companies to distribute 10% of taxable profit among employees each year, capped per employee since 2021. Both belong in your cost model from the first offer.
Employees pay progressive income tax up to 35%* plus a small IMSS share, withheld through payroll.
*All figures are estimates from public sources (2025-26), pending ops verification - same basis as the EOR cost calculator. Not tax or legal advice.
Compliant local contract, IMSS registration, Aguinaldo, PTU, and payroll - handled. One invoice, flat $399/month.