Free tool
Mexico Employee Cost Calculator
Employing in Mexico typically costs 1.30 to 1.40 times base salary once social security, housing, retirement, payroll tax and statutory bonuses are included. Model your role below, then compare an Employer of Record against running your own entity.
Estimated total annual cost per employee
$50,967
1.70× base salary · $4,247 per month · $50,967 per year for 1 person
| Base salary | $30,000 |
| IMSS social security | $6,000 |
| INFONAVIT housing | $1,500 |
| SAR retirement | $600 |
| State payroll tax | $900 |
| Aguinaldo (15 days) | $1,233 |
| Vacation premium | $247 |
| Profit sharing accrual | $900 |
| Additional benefits | $2,400 |
| EOR fees | $7,188 |
Employment solution versus your own entity
- EOR, per employee / year
- $50,967
- Own entity, per employee / year
- $88,779
- Approximate breakeven headcount
- 7 employees
Below the breakeven headcount an employment solution is usually cheaper because entity overhead is fixed. Above it, an owned entity usually wins on cost, though speed, control, permanence and risk should also drive the decision.
Planning estimate only. Actual cost depends on state, IMSS risk class, integrated daily salary, benefits design and your own entity's service quotes.
Methodology, assumptions and sources
- · Employer IMSS contributions are modeled at approximately 20% of salary. The true rate depends on the integrated daily salary and the employer's occupational risk class (Ley del Seguro Social; IMSS).
- · INFONAVIT housing contribution: 5% of the integrated daily salary.
- · SAR retirement contribution: 2% of the integrated daily salary.
- · State payroll tax (impuesto sobre nóminas) varies by state, typically 1% to 4%; the default shown is 3%.
- · Aguinaldo: statutory minimum of 15 days of salary (Ley Federal del Trabajo, art. 87).
- · Vacation premium: 25% of vacation pay, modeled on 12 vacation days, the statutory first-year minimum since the 2023 reform (LFT arts. 76 and 80).
- · PTU profit sharing: accrued at 3% of salary as a planning proxy where PTU applies; statutory PTU is 10% of taxable profit with a cap of three months' salary or the average of the last three years, whichever is more favorable (LFT art. 127).
- · Own-entity overhead is your input, defaulted to USD 45,000 per year for accounting, tax filings, legal, payroll administration, HR support, banking and compliance for a small entity. Incorporation, office, and management time are not included.
- · Sources: Ley Federal del Trabajo (Cámara de Diputados), Ley del Seguro Social, IMSS, INFONAVIT, SAT and state finance ministries.
Assumptions reviewed by the Staffing in Mexico compliance and payroll team. Last reviewed: September 2, 2026. This tool is a planning estimate, not legal, tax or accounting advice.
Have our team finish this for you
Get the full cost model for your roles and your city
We rebuild this estimate with the real IMSS risk class, state payroll tax and market benefits for the roles you are hiring, and a specialist reviews it with you.
- Line by line burden model per role, in MXN and USD
- State by state comparison of your shortlist cities
- EOR versus own entity breakeven at your headcount
- Current salary bands so your offers land
Frequently asked questions
What does it really cost to employ someone in Mexico?+
Plan on roughly 1.30 to 1.40 times base salary once IMSS, INFONAVIT, SAR, state payroll tax, aguinaldo, vacation premium and profit sharing are included. Benefits above the statutory minimum, such as private medical insurance and grocery vouchers, add on top.
Which employer contributions are mandatory?+
IMSS social security across several branches, INFONAVIT housing at 5 percent of integrated salary, SAR retirement at 2 percent and state payroll tax that typically ranges from 1 to 4 percent depending on the state.
Are aguinaldo and vacation premium extra costs?+
Yes. The 15-day minimum aguinaldo and the 25 percent vacation premium are statutory cash costs on top of base salary, and they also increase the integrated daily salary used to calculate social security.
How much does an Employer of Record add?+
EOR pricing is usually a flat monthly fee per employee or a percentage of payroll. This calculator lets you model either, so you can compare EOR against the cost of opening and running your own Mexican entity.
Is this calculator a quote?+
No. It is a planning estimate based on typical statutory rates. Actual cost depends on the state, the IMSS risk class of the role, the benefits package and the integrated daily salary. We will model your exact scenario on request.
Want this reviewed for your actual case?
A Mexico specialist reviews your numbers and comes back with the structure, the timeline and what it costs.