How to hire employees in Mexico: IMSS, payroll and obligations 2026

When are you legally required to register employees?

In Mexico, any working relationship involving subordination, a schedule and pay is considered a formal employment contract, regardless of what you call it. If you pay someone periodically to work under your direction, you are legally required to:

• Register them with IMSS (social security)
• Issue a payroll CFDI with each payment
• Pay all mandatory benefits under the Federal Labor Law (LFT)
• Withhold and remit the applicable income tax (ISR)
• Make contributions to INFONAVIT and the retirement fund (SAR/Afore)

This applies whether you are an individual with business activity or a legal entity (SA de CV, SRL, etc.). Failing to register employees is both a labor and tax violation.

Step by step: how to hire an employee in Mexico

Step 1 — Ensure your RFC and tax regime are correctly set up

To register employees you need an active RFC in a regime that allows payroll deductions. If you are an individual with business activity, verify your RFC registration. If you operate a company, you need the company RFC plus the legal representative's RFC.

Step 2 — Register as an employer with IMSS

Before registering your first employee, you must register your company as an employer (patrón) with IMSS. This can be done at your local IMSS office or digitally at imss.gob.mx.

Required documents for employer registration:

• Constancia de Situación Fiscal (active RFC)
• Proof of tax address
• Official ID of the owner or legal representative
• Incorporation deed (if you have a company)
• Bank CLABE for automatic debit

Step 3 — Collect the employee's data

To register each employee with IMSS you need:

• Employee's CURP
• NSS (Social Security Number) — if they do not have one, IMSS assigns it at registration
• Employee's RFC (to issue payroll CFDI)
• Bank CLABE for salary deposits

Step 4 — Calculate the Base Contribution Salary (SBC)

The SBC is the base on which all IMSS, INFONAVIT and SAR contributions are calculated. It is not the same as the net salary the employee receives:

Step 5 — Register the employee with IMSS on or before their start date

IMSS registration must be completed on or before the employee's first day of work. Late registration triggers automatic fines. Use the IDSE portal (IMSS Desde Su Empresa) or visit your local IMSS office.

Step 6 — Sign a written employment contract

The LFT requires written contracts. Most common types:

• Indefinite term: the most common — no end date, maximum employee protection.
• Fixed term: only when the activity or project has a defined duration.
• Trial period: up to 30 days (90 days for management roles). The employee has full statutory rights during this period.

Step 7 — Issue payroll CFDI with every payment

Each salary payment must be accompanied by a payroll CFDI (type "N"). Without it, the payroll expense is not tax-deductible for ISR purposes. If you already issue CFDI invoices, the process is similar — you will need a PAC (authorized certifying provider) such as CONTPAQi, Aspel or Facturama.

IMSS contributions: how much does the employer pay?

This means the real cost to the employer for an employee with a gross salary of $20,000 MXN/month is approximately $26,000–$27,000 MXN/month including all contributions.

Mandatory statutory benefits (LFT)

ISR withholding on payroll

As an employer, you are responsible for calculating, withholding and remitting ISR to SAT on behalf of your employees every month. Use the progressive monthly table under Article 96 of the LISR. For more information on ISR calculations, see our complete ISR guide for individuals.

Can I hire employees under RESICO?

Yes, you can have employees under RESICO, but your annual income must remain under $3.5 million pesos (for individuals). Payroll expenses are deductible under RESICO, which can reduce your taxable base. If you grow beyond that threshold, migrating to the Business and Professional Activity regime may be more advantageous — our accountants can analyze your specific case.

Dismissal costs

• Voluntary resignation: pay proportional aguinaldo, vacation days and vacation premium for the period worked.
• Unjustified dismissal: proportional benefits plus 3 months' salary + 20 days per year worked + 12 days seniority premium per year.
• Justified dismissal: proportional benefits only, no constitutional severance.

Frequently asked questions

Can I hire a foreigner?

Yes, but they must have a valid work permit (residence card with work authorization). They need RFC, CURP and a social security number. You must also notify INM (immigration authority). There is generally a limit of 10% foreign staff in most companies. If you are planning to run a company with foreign staff, our team can guide you.

What does managing payroll with an accountant cost?

With Nexoconsult, payroll administration is included in our plans from $1,500 MXN/month. This covers payroll calculation, CFDI issuance, IMSS contributions, ISR withholding and monthly declarations.