Mexico Payroll Costs and Calculations

Payroll Contributions Cost
Social Security Contributions (IMSS)
The contributions include for;

  • Illness and maternity
  • Disability and life
  • Retirement
  • Severance at advance/old age
  • Childcare and social benefits
  • Labor risk insurance
Approx. 25% of the employee’s gross salary
Housing fund (INFONAVIT) Around 5% of the employee’s gross salary
State payroll tax (depends on employee state and gross salary) 1.8% to 4%
Christmas bonus (Aguinaldo): 15 days of pay 4.11%
Vacation pay premium (A 25% salary premium needs to be paid for paid vacations. The Number of PTO in a year varies from 12 to 32 depending on the employee’s tenure) 0.82% to 1.5%
Total *36% (Approx.)


Mandatory Employee Benefits

Payroll Contributions Cost
Christmas Bonus (Aguinaldo) 15 days of pay paid once a year
Paid Time Off 12 to 32 days. 12 days after one year of service with 2 days increased for an additional year of service and capped at 32 days
Separation pay Voluntary resignation: Seniority premium of 12 days salary for each year of service

Termination with cause: Seniority premium of 12 days salary for each year of service.

If an employee is terminated because of a performance issue, it cannot be considered termination with cause.

Termination without cause: Three months of employee salary + 20 days of employee aggregate salary for each year of service.


*Please note that any overage fee collected as part of the employer payroll costs will be refunded to the customer by Global Squirrels upon an employee’s termination of employment.

All numbers shown are approximate figures and vary due to changes in laws. It is also almost impossible to estimate accurate numbers since various contributions have a limit on the maximum contribution and some contribution criteria change based on employee gross pay.

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