Major economic sectors in Mexico are services, agriculture, manufacturing, commerce, mining, and energy production. Mexico houses the highest number of Spanish speakers in the world, and it is the 10th most populous country in the world.

Major economic hubs:

‍Mexico City, Guadalajara, Monterrey

Skills in Demand:

‍Automotive-Related Skills, Aviation-Related Jobs, Project Automation, Data Analyst, AI & Machine Learning, Digital Marketing & Strategy

Resident Tax Information

All Mexican residents are taxed on their worldwide income; however, non-residents are taxed on their income derived from Mexican sources.

Mexico's taxation system is progressive, meaning that higher income residents will pay more taxes than those with lower salaries.

The income tax brackets for resident individuals of Mexico are below —

Social Security

Employers must enrol their employees in the social security system and contribute to it.

The employer and employee contributions include —

Statutory Benefits

Statutory leaves in Mexico are mandatory for all employers to provide their employees. These benefits include the minimums an employee is entitled to during any given calendar year, which cannot be declined or ignored by either party involved with it.

Statutory benefits in Mexico include –

All Mexican employees are entitled to statutory leaves as described in the table above.

The bonus for the 13th month of work is mandatory and must be paid by December 20th (aguinaldo). It's calculated as salaries for 15 working days with an allowance based on a 265-day year.

Mexican employees have a legal obligation to enroll in social security and contribute accordingly. This coverage includes the following areas:

• Occupational hazards

• llness and maternity insurance

• Childcare facilities, nursery, and social provision

• Nursery services
  

Whenever an employer generates profits in a year, they must pay 10% of their profits to their employees. The amount is shared in two parts -

• Distributed based on the number of days worked in a year

• Distributed based on the employee's income level.  

However, this benefit does not apply to employees with a strategic positions such as a CEO, CFO, board of directors, administration and finance Directors, and general managers.

The seniority premium is an important benefit for full-time permanent employees. It guarantees them jobs with longer tenures and higher salaries as they've been around the block more than any other employee!

• Salary for twelve days for each year of tenure or,

• Twelve days of 2 times monthly UMA for every year of employment.
  

Fringe Benefits

Fringe benefits are provided to employees in addition to statutory leaves, statutory benefits, and annual compensation. There are certain commonly provided fringe benefits provided to employees in Mexico, which include —

• Meal vouchers or in-office canteens
• Company vehicle
• Funeral expenses ranging between MXN 1,500 to MXN 5,000
• Additional paid time off or annual leaves

Exempt Benefits

There are certain benefits provided by employers that are not taxable as per the income tax regulations of Mexico. Such benefits include —

Personal expenses up to

• A maximum of 15% of the annual income or,H

• An amount equal to a five-year UMA (with a maximum ceiling of MXN 175,505).

Charities can expect to receive 7% of last year's taxable income as a donation.

Medical expenses should be taken care of in case you need them

Home mortgages are often capped at a certain amount, and this can be dependent on the mortgage interest rate.

Social security contributions

Contributions towards private pension plans or employer-sponsored pension plans

The cost of education varies depending on the level. However, university fees are not deductible

- MXN 12900 to 24500 annually for undergraduate study  – Upgrades available with an additional charge

Long-term Incentives

Long-term incentives are a great way to make your company more competitive in the market. These types of benefits can help you retain key employees or gain access for new ones, so it's important not only from an economic point but also psychological perspective that companies consider offering them when possible.

The most widely provided long-term incentives include —

• Employee stock options

• Health insurance with additional dental covers

• Performance-linked incentives

• Employer-sponsored pension plans

• Total and permanent disability cover

Termination Process

Both the employee and the employer are entitled to terminate the employment.

Notice Period

The notice period for permanent employees is a minimum of 30 days, and for employees on probation, it ranges from 7 - 14 days.

Severance Pay

If the termination is with a clause, employees are entitled to all benefits including commissions on a prorated basis until the termination date and the seniority premium of twelve days' salary for each year of service.

If the termination is without a clause, employees are entitled to the following lump-sum payment:

• Three months of the employee’s aggregate salary, plus
• Twenty days of an employee’s aggregate salary for each year of service
• A seniority premium of twelve days’ salary for each year of service
• Benefits due