Payroll services
in Mexico

Run payroll, tax, and benefits in Mexico without the local setup. Fully localized, legally aligned, and built for tech hiring.

Natify
BBG
Black Beacon
MediaMath
Rubicon Project
Trusted Insight
Pebble Post
Pluto TV
Adoppler
Savveo
Traveling Spoon

Tech-backed scalable payroll in Mexico

Smart payroll with accurate deductions, legal alignment, and full support for Mexico hiring.

  • Onboard in one week
    Engineers with contracts and filings in place.
  • Payroll without guesswork
    We run calculations, contributions, and reporting.
  • Aligned with legal framework
    Ensuring national law and tech-sector standards.
  • Integrated IP protection
    Your code, data, and innovation stay secured.
  • Benefits tech talent expects
    Private healthcare, equity, and remote stipends.
  • Agile hiring, clear terms
    Add or reduce headcount with flexible terms.

Mexico

Nearshore payroll bridge for U.S. and LATAM teams.
Bilingual workforce used to global payroll systems.
Clear labor rules for salary, tax, and exits.
GDP

MX$25.3 trillion

Language

Spanish

Currency

MX$ (Mex$, $)

Software developer’s salary range:

MX$480k–720k/year

Mexico payroll tax rates

ISR (income tax)

1.92%–35%, withheld by employer

IMSS (social security)

25–30%, employer-paid

INFONAVIT (housing fund)

around 5%, employer-paid

SAR (retirement savings)

2%, employer-paid

Need to pay your dev team in Mexico?

We manage it clearly and fast.

State payroll tax

Extra 1%–3%, varies by state and company type

Freelancer tax (self‑employed)

ISR and 16% VAT via CFDI

Reporting

Monthly CFDI and contributions filed to SAT.

Excerpts from Mexican labor law

Wage

Minimum: MX$248.93/day (2025); higher in border zones.

Overtime

2x for the first 9 extra hours/week, 3x beyond.

Payroll cycle

  • Biweekly is standard
  • Monthly permitted

Pay stub

CFDI de nómina in digital format.

Essential employee benefits

  • IMSS covers health, pension, housing via employer contributions
  • 12 days paid vacation minimum after one year, increasing with tenure
  • 15-day aguinaldo and 10% profit sharing (PTU)
  • 12 weeks maternity, 5 days paternity leave
  • Private health, food vouchers, remote work support (optional)

Payroll framework
in Mexico

Every step of tech payroll needs to follow the law. That means knowing how payroll taxes in Mexico work, classifying roles correctly, and fulfilling social security service requirements.

Tech worker classification in Mexico

Employees and self-employed professionals in Mexico

Correctly classifying employees and self-employed professionals is essential for companies operating in Mexico. Misclassification can lead to retroactive tax liabilities, penalties from SAT, and full employer obligations under IMSS.

Employees (Trabajadores subordinados)
Definition
Hired under a formal employment contract governed by the Federal Labor Law (Ley Federal del Trabajo), either indefinite or fixed-term. Covered by all national employment protections.
Key rights and benefits
  • Statutory paid vacation and public holidays
  • Social security through IMSS and SAR pension contributions
  • Annual bonus (aguinaldo) and profit sharing (PTU)
  • Paid parental leave, sick leave, and workplace protections
  • Termination rights and severance if applicable
Work structure
Employees perform duties under company direction, using employer tools, within set schedules or targets. This relationship involves economic dependence and legal subordination.
Common roles
Software Engineers, Backend Developers, Product Designers, QA Analysts, HR or Finance Ops
Self-employed professionals (Prestadores de servicios independientes)
Definition
Registered as individuals with tax status under SAT, working independently without subordination. Usually operate under civil or commercial agreements, not employment law.
Tax registration
Must register with SAT and issue digital invoices (CFDI). Responsible for paying ISR (income tax), IVA (VAT, if applicable), and optional social security via IMSS voluntary regime.
Work structure
Contractors operate on flexible terms, using their own tools and setting their own hours. No direct supervision or integration into company hierarchy.
Common roles
Freelance Developers, Data Consultants, UI Contractors, Interim CTOs, DevOps Experts
Legal caution
If a contractor behaves like an employee—fixed hours, direct oversight, or exclusive commitment—they risk reclassification. This can trigger audits, retroactive contributions, and formal employment obligations enforced by SAT and IMSS.
Contractor rules in Mexico

In Mexico, worker classification is regulated by SAT and IMSS. Companies must correctly distinguish between contractors and employees, especially when hiring remote specialists. Legal status depends on how the work is performed, not where the person lives.

When contractors are reclassified

Independent professionals may be treated as employees if:

  • They follow schedules or routines set by the company
  • They rely on internal tools or infrastructure
  • Their work is approved or directed by in-house managers
  • They depend financially on a single client

When these conditions are met, SAT or IMSS may reclassify the role. This creates retroactive obligations, including payroll filings, IMSS registration, and full employee benefits under Mexican labor law.

Risks with remote tech roles

Even remote engineers, developers, or product contractors may be seen as employees if:

  • They join team meetings or report to company leads
  • They work through Slack, GitHub, or internal tools
  • Their scope is reviewed or modified by managers
  • They are paid monthly based on time or output

To avoid reclassification, make sure your contractor model reflects genuine autonomy.

Remote work standards in Mexico

Companies hiring remote or hybrid tech professionals in Mexico must meet labor, tax, and safety requirements—regardless of where the work is performed.

Right to work

Employees must be Mexican citizens or hold valid residency and a work permit. Foreign workers require sponsorship and must remain employed to maintain status.

Company obligations

Equipment and expenses

Under teletrabajo law, employers must cover proportional costs for electricity, internet, and necessary equipment. Terms must be specified in the employment contract.

Health and safety

Per NOM-037-STPS-2023, employers are responsible for ensuring safe conditions in remote environments. This includes ergonomic evaluations, hazard prevention, and access to occupational health support.

Data protection and cybersecurity

Workforce responsibilities include:

  • Secure access to internal systems and client data
  • Defined policies for remote tools and file storage
  • Transparent consent handling under Mexico’s LFPDPPP law

Cross-border data handling

If remote employees access or store data across borders, companies must ensure safeguards under LFPDPPP and adhere to global standards where applicable (e.g., SCCs for U.S. SaaS tools).

Payroll implications

Remote or hybrid setups do not exempt companies from payroll filings, tax declarations (SAT), or IMSS contributions. All remote employees must be fully reported.

Equity compensation in Mexico

Equity can be part of a tech compensation strategy in Mexico, but it requires clear tax treatment and careful structuring. There are no EMI-style tax incentives available.

Stock options and RSUs in Mexico
Companies may offer stock options, RSUs, or phantom equity. However, all forms of equity are treated as taxable income when exercised, vested, or transferred.
Reporting requirements
Equity must be declared through the employer’s monthly payroll filings (via SAT). Even if issued by a foreign parent company, the taxable value must be reflected in CFDI and included in gross salary calculations.
Phantom stock and bonus alternatives
Many companies avoid direct equity by offering phantom shares or long-term cash bonuses tied to valuation milestones. These reduce tax exposure and simplify reporting.
Tax treatment
  • Equity is taxed as regular salary income (ISR applies)
  • Employers must contribute IMSS, INFONAVIT, and SAR on the equity’s value
  • CFDI must reflect the equity value in the employee’s pay stub when triggered
Cross-border risks
If equity is granted by a foreign entity, Mexican tax authorities may still require local reporting and contributions. Mismatched timing or omission in CFDI can result in fines or audits.
Pay stub (CFDI de nómina)

​​Issuing a pay stub is mandatory under Mexican labor law. Employers must provide a CFDI de nómina—digitally signed XML and PDF—on or before each payday.

What a CFDI de nómina must include:

  • Gross salary
  • Net salary after ISR and deductions
  • Breakdown of ISR, IMSS, INFONAVIT, and SAR contributions
  • Pay period covered
  • Bonuses and benefits (aguinaldo, PTU, allowances)
  • Employer and employee tax IDs (RFCs)
Regional payroll rules in Mexico

Mexico follows national labor law, but employers must still account for regional taxes, remote work policies, and foreign hire procedures—especially when building cross-state teams or managing hybrid operations.

Key location-based and structural factors:

  • State payroll taxes range from 1% to 3%, in addition to federal contributions.
  • Profit sharing (PTU) calculations may differ slightly by sector or location.
  • Some states require additional payroll filings or documentation.
  • Hybrid and remote setups must follow NOM-037-STPS guidelines.
  • Payroll rules for visa holders must reflect immigration-linked employer duties.

Most tech employers operate under national frameworks—but if your engineers span multiple states, or your company sponsors foreign talent, regional compliance becomes essential.

Mexico payroll and HR challenges

Mexico’s HR landscape requires more than automation. Payroll outsourcing in Mexico demands legal fluency, accurate contributions, and region-specific handling.

Wage structure alignment

Gaps between legal, local, and tech pay can raise red flags.

Streamlining remote onboarding

Worker classification risks

Misclassified contractors may trigger ISR debts and employment liabilities.

Pay stub compliance

CFDI must detail net pay, taxes, and follow SAT formatting.

Unprotected payroll data

Data protection risks

Software engineers must follow LFPDPPP for data, IP, and access security.

Cost and efficiency imbalance

Social contribution complexity

Errors in IMSS and INFONAVIT filings delay pay stubs or cause audits.

Leave and bonus calculations

Track all paid leave, aguinaldo, and PTU with precision.

Remote work obligations

Teletrabajo requires cost reimbursement and ergonomic documentation under law.

Retention and reputation

Payroll mistakes hurt morale—tech teams expect clarity and accuracy.

Built for Mexico-managed teams

Unlike other payroll providers in Mexico, we speak tech and law fluently.

Payroll operations setup

SAT registration, CFDI issuance, and all ISR, IMSS, and INFONAVIT procedures handled in one integrated monthly cycle.

Worker classification

Clear guidance on employee vs contractor status to minimize liability and stay within Mexican labor law boundaries.

Monthly payroll delivery

From gross-to-net calculations to XML validation, filings, and digital pay stubs—processed through SAT-compliant systems.

Equity and bonus handling

Phantom shares, RSUs, and performance bonuses mapped into compliant payroll structures and cross-border reports.

Benefits administration

Configurable health insurance, food vouchers, internet stipends, and other perks designed to attract and retain tech talent.

Data and platform security

All payroll data is encrypted and stored in environments audited for LFPDPPP, SAT, and IMSS compliance.

Outperforming payroll companies in Mexico

Most payroll services in Mexico offer surface-level coverage with limited tech sector focus. GEOR delivers strategic payroll outsourcing with deep expertise in Mexico payroll, achieving faster onboarding, lower costs, and stronger workforce retention.

96%
reduction in hiring time.
40%
savings in HR and operational costs.
4x
faster market entry.
92%
employee retention rate.
Simple,
transparent pricing

Our basic package is ideal for startups, growing businesses, and nearshore teams seeking to go beyond standard outsourcing.

Basic
  • Onboarding within 7 days
  • Payroll processing
  • Pension, social fees, and reporting
$499

per employee/ month.
No hidden fees or extra charges.

Your payroll no‑brainer in Mexico

Start paying your team as early as tomorrow.
See how simple it is to run compliant payroll with GEOR.

Contact us_Tamuna

Client Feedback

Brad Weatherly
Brad Weatherly
Executive Vice President
Sapience

The platform they use to qualify, score, and predict candidate success was incredibly helpful during the hiring process. It made a significant difference.

David C Peterson
David C Peterson
CTO
PebblePost

The GEOR team was essentially an extension of our team. They found highly skilled engineers to manage core project goals, supporting the development of a scalable and reliable platform.

Greg Tearne
Greg Tearne
Chief Executive Officer
Altapac Group

They go above and beyond with their service delivery. My initial expectations have not only been met but exceeded to a level I didn’t think possible.

JJ Garofalo
JJ Garofalo
Chief Executive Officer
Legal Resources

They did a great job! Plan to use them in the future for more hiring. I like how they ask a lot of questions about what we needed, and then followed up quickly with results.

Victor Fei
Victor Fei
Founder & CEO
Ormi Labs, Inc.

We’ve been really impressed with the temporary labor services they’ve offered. Thanks to them, we were able to secure contracts with top blockchain developers and DEFI projects.

Allen Wright
Allen Wright
Senior Vice President
HealthTrust Performance Group

Fantastic, constant communication and exchange of information, high efficiency in the execution of tasks, speed in action great cooperation and mutual understanding. I really like the quality of the candidates they were able to bring.

Why companies switch to GEOR

Built for Mexico’s legal landscape and tech hiring realities. We combine local expertise with full payroll ownership to offer more than just a platform.

Feature GEOR Paylocity Multiplier
Local compliance Mexico-based ops and legal team U.S.-centric, limited Mexico coverage Relies on partners, limited local depth
Payroll structure CFDI-ready, full ISR/IMSS/INFONAVIT flow Generalized global payroll solutions Standardized global templates
Tech expertise Built for software, product, and data teams Broad industry focus Broad industries, not tech-focused
Equity/bonuses Includes phantom stock, PTU, and aguinaldo Limited support for local equity schemes Minimal support for equity structures
Support Bilingual HR + SAT experts U.S.-based support, limited local insight Ticket-based, slower response

Built for fast-moving engineering teams

Scale in Mexico with a provider that gets how engineering teams really operate. GEOR knows the pace of tech hiring, the pressure to retain top talent, and how much rides on getting every contract right. We deliver structure with intelligence, not burden.

GEOR

Mexico payroll that just works.

Test the easy way.

FAQs

What makes payroll processing in Mexico unique?

Employers must issue CFDI digital pay stubs and submit monthly payroll reports to SAT. Bonuses, benefits, and contributions are regulated under federal law.

Why is GEOR more reliable than automated payroll platforms?

We combine automation with bilingual HR and legal support to ensure accurate filings, proper classification, and full alignment with local requirements.

Can I run payroll in Mexico without a local company?

Yes. GEOR can act as your local Employer of Record, managing contracts, compensation, and government filings on your behalf.

Can GEOR support payroll in Mexico for international companies?

Absolutely. We work with global employers to ensure their Mexico-based staff are fully compliant, even without setting up a legal entity.

What salary deductions and contributions does GEOR manage in Mexico?

We handle all calculations and filings for ISR (income tax), IMSS (social security), INFONAVIT (housing), SAR (retirement), and PTU (profit sharing).

Can a Mexico payroll provider support equity for tech staff?

Yes. We support phantom stock, RSUs, and performance-based bonuses, integrating them into CFDI and reporting them to SAT.

Do you support remote and hybrid tech teams in Mexico?

Yes. We structure remote work contracts, manage reimbursements, and stay aligned with NOM-037-STPS and labor regulations.

Do I need in-house HR to run payroll in Mexico?

No. GEOR handles onboarding, salary payments, and employee benefits so you can operate without a local HR team.

Is payroll data safe with GEOR in Mexico?

Yes. Our infrastructure complies with LFPDPPP and SAT data protection standards, using encrypted systems and secure CFDI delivery.

Can GEOR run payroll for both employees and contractors in Mexico?

Yes. We support both employment types, including CFDI invoicing and full ISR and IVA compliance for independent contractors.

How do you classify software employees in Mexico?

We follow national labor rules to assess whether a worker qualifies as an employee or contractor, based on control, exclusivity, and dependency.

How are self-employed tech professionals classified in Mexico?

Freelancers must register with SAT, issue CFDI invoices, and handle their own taxes. We verify setups to reduce the risk of misclassification.

How are pay stubs delivered in Mexico?

GEOR issues fully compliant CFDI de nómina (XML and PDF), delivered securely to each worker by or before the scheduled pay date.

Which companies offer tech payroll services in Mexico?

GEOR specializes in LATAM payroll for software teams, offering fast onboarding, legal alignment, and contractor-friendly support tools.