How to Hire Remote Employees In 


The Basics

Mexican Peso (MXN)
Employer Taxes
up to 22.75%
Payroll Frequency
Monthly / Bi-Monthly
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Time savings: Hiring through a subsidiary or EOR can take months of onerous paperwork and legal wrangling. This is only multiplied if you want to hire in multiple countries.
Reduced overhead: You can save tens of thousands of dollars in onboarding costs by hiring through a company like Panther. You also have fewer responsibilities to provide benefits, further reducing overhead.
Greater flexibility: Contractors can be brought on as-needed. If they are not a good fit, you can choose not to renew them without incurring significant additional termination costs.
Reduced legal risk: Contractors generally don't have the host of legal protections that typically cover full-time employees.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: While it's important to understand local contractor law, for most firms, misclassification risk is minimal.
Lack of Control: For a worker to be classified as a contractor, they should be allowed to work independently on their assigned tasks. Hiring full-time employees offers a wider range of management options.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Mexico can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Mexico, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Mexico.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Paying employees in  Mexico is not the same as paying workers in your own country. Employees have to be paid using Mexicos employment and payroll standards.


 Specific Information

Working Hours

Full time employment is considered 8 hours daily, 40 hours weekly.


Employees who earn minimum wage can work up to 9 hours exempt per week. The following 9 hours will be paid at a rate of 200% salary, with any hour beyond that paid at a rate of 300%.

Employees that earn more than the minimum wage are exempt for only 50% of the overtime worked per week up to 5 minimum wages per week. The first 9 hours will be paid at a rate of 200% and the following hours will be paid at a rate of 300%.

Payroll Tax



  • Sickness & Maternity
  • Disability & Death
  • Retirement
  • Layoff and Retirement Benefits
  • Work Related Accidents (depends on the state)
  • Housing Tax
  • Payroll State Tax (depends on the state)

Minimum Wage

The minimum hourly wage is 141.70 MXN.


Pay Cycle

The payroll cycle is bi-weekly. Payments are made every 15th day & last day of the month.

13th Salary

Employees receive 15 days of pay on 20th December as a Christmas bonus. 

Paying 13th and 14th salaries is also a common practice.


Paid Time Off (PTO)

Mandatory Vacations:

  • 1 year seniority = 6 days
  • 2 years seniority = 8 days
  • 3 years seniority = 10 days
  • 4 years seniority = 12 days
  • 5 to 9 years seniority = 14 days
  • 10 years or above – additional 2 days per 5 years.
  • No Carryover policy

Public Holidays

8 public holidays.

Sick Days

Pay is by social security based on the social security cap called “salario de cotizacion (SBC)”.

Maternity Leave

holidays for maternity leave (42 days before and42 days after birth of baby). Pay is by social security based on the social security cap called “salario decotizacion (SBC).

Paternity Leave

Male employee may take up to two weeks of paid time off following the birth of your baby.

Parental Leave

Parental leave is not mandatory.

Other Leave


Marriage Leave

No Info.

Bereavement Leave

You may take up to 20 calendar days (4 weeks) of full paid time (base salary) following the death of an immediate family member.


Termination Process

No mandatory process is required, however formalization of the termination before the conciliation and arbitration court is suggested.

Notice Period

There are no statutory notice periods for employment contracts in Mexico.

The employer is required to notify the employee in writing of the date and cause of dismissal, or must notify the relevant Conciliation and Arbitration Board no later than five days after the date of termination.

Severance Pay

Voluntary resignation: the employer must pay the employee all benefits that are due.  If the employee has 15 years or more of seniority, the employee is entitled to 12 days’ salary for each year employed.

Termination with Cause: The employer must pay the employee all benefits that are due. In addition, 12 days of salary for each year employed.

Termination without Cause:3 month’s salary, 20 days for each year in the company, and a seniority bonus of 12 days per year of service.  The employee will also receive back salary from the date of dismissal to the day that the employer complies with the Labor Board’s decision.

Probation Period

Optional, but the common practice is 3 months.