Payroll outsourcing Mexico
for your local team
We manage the full payroll cycle for your Mexico-based employees. CFDI 4.0 invoicing, IMSS social security, INFONAVIT housing fund and income tax withholding. Direct contract, no SaaS intermediary.
What Mexico payroll outsourcing includes
When you outsource Mexico payroll to ADN Services, you get a dedicated accountant who runs your entire payroll cycle. Not a platform you log into. A team that does it for you, every week or every two weeks.
- Payroll calculation: base salary, overtime, bonuses, commissions
- CFDI 4.0 electronic payroll receipts (Mexico's required invoicing standard since 2022)
- Income tax (ISR) withholding calculation and monthly reconciliation
- IMSS employer and employee social security contributions
- INFONAVIT housing fund contributions and credit deductions
- SUA monthly filing for IMSS payments
- Employee registrations, terminations and salary changes in IDSE (IMSS portal)
- PTU (profit sharing) annual calculation
- Salary disbursement file for your bank or coordination of direct transfer
- Monthly reports for your finance team or external auditors
Why Mexico payroll is different from US or EU payroll
Mexico has a unique combination of employer obligations that catch most foreign companies off guard:
CFDI 4.0 invoicing
Every payroll receipt must be electronically stamped through an authorized PAC (tax stamp provider). No exceptions since 2022.
IMSS contributions
Total employer contribution is approximately 20-25% of salary depending on the risk category. Filed monthly via SUA.
Mandatory benefits
Aguinaldo (Christmas bonus, 15 days minimum), vacation days, vacation premium (25%), IMSS, INFONAVIT and PTU profit sharing.
REPSE for specialized services
If you provide specialized services to a Mexican company, you need an active REPSE registration. ADN has one.
What it actually costs to employ someone in Mexico
Foreign companies often budget only the gross salary and get surprised by the mandatory add-ons. Here is the realistic picture of total employer cost in Mexico, on top of the gross salary you pay:
- IMSS social security: roughly 20 to 25% of salary, depending on your industry risk class
- INFONAVIT housing fund: 5% of the integrated salary
- State payroll tax (ISN): 1.5 to 3% depending on the state
- Aguinaldo: minimum 15 days of salary per year (Christmas bonus)
- Vacation premium: a 25% premium on top of the vacation days taken
- PTU profit sharing: 10% of taxable profit distributed to employees once a year
As a rule of thumb, total employer cost runs around 30 to 40% above gross salary. The exact figure depends on salary level, state and benefits. We model your real number before you hire, so there are no surprises in the first payroll run. This is also the part most global platforms quote vaguely: we give you a clear line-by-line breakdown per employee, in writing, so your HQ finance team can budget the Mexico operation with full confidence and no hidden line items.
Local partner or global platform: how to choose
Global payroll platforms work well when you have one or two people spread across many countries and you want a single dashboard. They are built for breadth, not for depth in any single market.
If Mexico is a real part of your operation, a local partner usually serves you better. You get a named accountant who knows Mexican labor law, who answers in your time zone, and who signs a direct contract with you under a Mexican RFC and an active REPSE registration. Your employees' data is not routed through a third party, and when the IMSS or the SAT asks a question, the person answering it is the same person who ran your payroll.
Frequently asked questions
How fast can you start running our Mexico payroll?
Typically 5 business days from signed contract. We need your employees' payroll history for the current year, existing employment contracts, and access to your IMSS employer registration. We walk you through exactly what to send.
Do we need to set up a Mexican legal entity first?
Not necessarily. Depending on your setup, we can work with your existing entity or through our PEO/EOR structure. Tell us your situation and we will recommend the right approach. See our PEO Mexico and EOR alternative services for more detail.
What does Mexico payroll cost per employee per month?
Service fees depend on number of employees and payroll frequency. We provide a fixed monthly fee per employee so you can budget accurately. Mandatory employer costs (IMSS, INFONAVIT, etc.) are separate and pass through at actual cost. Contact us for a specific quote.
Can you handle payroll for employees in different Mexican states?
Yes. We handle multi-state payroll including correct calculation of ISN (Impuesto sobre Nominas), the state payroll tax that varies by state. We need the corresponding IMSS employer registration for each state where you have employees.
Who is the legal employer of our Mexico staff?
It depends on the model you choose. Under direct payroll outsourcing, your own Mexican entity stays the employer and we run the process. Under our PEO or EOR alternative structure, the employment relationship is handled through a Mexican entity so you can hire without setting up your own. We help you pick the model that fits your plans.
Can our employees be paid in US dollars?
Mexican payroll is calculated and reported in pesos, and CFDI receipts are issued in pesos by law. We can reference a USD equivalent for your internal reporting, but the official payroll, taxes and social security are always settled in Mexican pesos.
How do you keep our payroll data secure?
Your employee and salary data is handled under a privacy notice compliant with Mexican data protection law. It is shared only with the authorized people on your side and with the tax authority when the law requires it. No third-party platform sits between you and your data.
How do you report back to our HQ finance team?
After every payroll run we send a reconciled report you can hand straight to your finance team or external auditors. It breaks down gross pay, withholdings, employer contributions and total cost per employee, in a format your HQ can read without needing to interpret Mexican payslips. If you consolidate in USD, we include the equivalent for your internal reporting.
How onboarding works
We can have your first payroll running in 5 business days. Here is what that looks like:
You send us the basics
Current year payroll history, employment contracts and IMSS employer registration access. We tell you exactly what we need in a simple checklist.
We configure CFDI 4.0
We set up your electronic payroll receipt system with your tax ID (RFC), compensation structure and the correct concept codes.
Test payroll run
We process a test payroll for you to review before going live. You approve the numbers, then we run production.
Related services
- EOR Mexico alternative: direct local partner positioning vs global SaaS providers
- PEO Mexico: co-employment model for companies setting up operations
- Contact us: get a specific proposal for your Mexico team
Ready to run Mexico payroll correctly?
First payroll running in 5 business days. Direct contract. No platform fees.