The complete guide to offering employee benefits in Mexico
In this article
When hiring employees in Mexico, the benefits plan you offer can be one of the most important parts of the deal. Mexico has robust labor laws that grant employees a wide range of statutory benefits. No matter where your company is based, if you're going to hire a worker in Mexico, you'll want to know the legal requirements so you can offer a benefits package that's compliant with Mexican laws.
Here's everything you need to know to offer benefits that meet statutory requirements under Mexican labor laws—plus extra benefits you can offer to go above and beyond for your employees in Mexico.
What employee benefits are mandatory in Mexico?
Employers who hire workers in Mexico are governed by several labor laws that require them to offer certain benefits. If you employ a Mexican worker and you don't offer the right statutory benefits, you could face fines and other punishments from the Mexican government.
Note that the benefits outlined below are statutory minimums, and employers can always offer more than these mandatory benefits. Also, note that these benefits are mandatory for employees—independent contractors in Mexico aren't entitled to any benefits.
Social security
Mexican social security, called Instituto Mexicano del Seguro Social or IMSS, covers medical and social needs for all Mexican workers.
Employers typically contribute 25-35% on top of their employees' salaries to IMSS, which covers:
Healthcare
Pension plans
Employment insurance
Work risk insurance
Life insurance
Disability pay
Sick leave
Parental leave (both maternity leave and paternity leave)
Childcare
Social housing
Many of the benefits that Mexican employees are accustomed to receiving are statutory, but not supplied directly by their employer—paid sick leave, for example, is something all Mexican workers are entitled to that is covered by the IMSS rather than their employer.
Type of Termination | Severance Pay |
|---|---|
Voluntary resignation | Prorated vacation and Christmas bonuses (also known as "basic settlement"). Employees with more than 15 years of service are also entitled to an antiquity premium of 12 days of salary for every year worked. |
Terminated with cause | Same as voluntary resignation |
Terminated without cause | Basic settlement plus antiquity premium if required, plus three months of salary and an additional 20 days of salary for every year worked. |
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Christina Marfice
Christina is a writer, editor, and content strategist based in Chicago. Having lived and worked in Argentina, Colombia, Mexico, and Peru, she’s bringing her expertise on hiring in Latin America to Rippling.
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