Expatries Network
Mexico

Employment contract and termination in Mexico

In Mexico, the drafting of the employment contract commits the payroll for its whole duration: the language used, the form adopted and the mandatory particulars are fixed by local law, not by the practice of head office.

Termination is the moment when drafting errors are paid for. Final settlement, notice, severance and exit documents obey local rules that the payroll manager applies every month: it is that person, and not the legal department at head office, who spots a poorly drawn contract. Having the model contract reviewed by the firm that will run the payroll costs little and avoids most disputes.

The year-end bonus and statutory profit sharing are two legal obligations that arise independently of any collective agreement; profit sharing is subject to exclusions set out in the federal labour law, which have to be checked company by company. Both must be budgeted from the first hire.

The electronic payroll invoice is the second distinctive feature: a payslip is not merely a document handed to the employee, it is a tax file validated in real time by the administration. A payroll error therefore becomes a tax error immediately.

Market terminology, finally, carries real consequences. The expressions used to describe payroll outsourcing cover legally different arrangements, and only the placing of personnel at a client's disposal brings a provider within the scope of compulsory registration with the labour ministry. A client whose provider should have held that registration loses deductibility of the expense entirely.

The local framework in Mexico

Working languages
Spanish
Payroll currency
MXN
European status
Outside the European Union and the European Economic Area

Points to watch in Mexico

Le triptyque SAT / IMSS / INFONAVIT est indissociable : n'accepter un dossier que si les trois opiniones de cumplimiento sont positives et datent de moins de 30 jours, ce qui impose de les redemander à chaque renouvellement annuel. Deuxième piège : la e.firma (ex-FIEL) du cabinet est la clé technique de tous ces téléchargements ; un partenaire qui ne peut pas générer ses propres constancias n'a probablement pas la main sur sa conformité. Troisième piège : les termes « maquila de nómina », « despacho contable » et « outsourcing de nómina » sont employés indifféremment, mais seul le dernier peut faire basculer le cabinet dans le champ obligatoire du REPSE.

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