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Mexico's nearshore talent market is among the Americas' most active. Rippling runs Mexican payroll through a REPSE-registered entity, handling IMSS, CFDI electronic receipts, PTU profit-sharing, and LFT compliance.
Mexico is one of Latin America's most important payroll markets for US companies, offering nearshore talent with overlapping time zones and CUSMA/USMCA trade alignment. The 2021 Outsourcing Reform fundamentally changed how payroll is structured for service companies, requiring REPSE registration and monthly IMSS/INFONAVIT reporting. Guadalajara, Mexico City, and Monterrey are the primary payroll hubs.
Mexican S.A. de C.V. or S.A.P.I. requires SAT registration, IMSS registration, INFONAVIT registration, and REPSE registration. The 2021 Outsourcing Reform added REPSE certification and monthly IMSS/INFONAVIT reporting requirements for service companies. All payroll data must be supported by CFDI 3.3 electronic payroll receipts (recibos de nómina digitales) stamped via the SAT portal.
Rippling runs Mexican payroll through a REPSE-registered entity. Configuration essentials: CFDI 3.3 timbrado setup (SAT certification — day-one requirement); IMSS affiliation within 5 days; bi-weekly payroll with bimonthly IMSS declarations; aguinaldo December provision; PTU monthly accrual; and vales de despensa benefit configuration. Lead time: 2–3 weeks.
IMSS employer cuotas: approximately 17–20% of SBC (enfermedades y maternidad, riesgos de trabajo, invalidez y vida, guarderías, retiro). INFONAVIT: 5% of SBC. AFORE/RCV: 6.275%. Aguinaldo provision: 1/12 monthly. Prima vacacional: 25% of vacation salary. Total employer on-cost: approximately 30–38% above salary.
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IMSS employee cuotas: approximately 1.65–2.2% of SBC. AFORE/RCV: 1.125% of SBC. ISR (income tax): progressive rates per Article 96 LISR — 1.92% up to MXN 1,786.53/month scaling to 35% above MXN 1,000,000/month. Total employee deductions: approximately 5–15% of gross depending on income level.
Mexican ISR withheld monthly via Article 96 LISR tables. Progressive monthly rates: 1.92% up to MXN 1,786.53 scaling to 35% above MXN 1,000,000/month. Annual ISR return filed by employee by April 30. Rippling calculates ISR monthly and generates the annual reconciliation (cálculo anual de ISR) in January for the prior year.
Vacation: 12 days year 1; +2 days/year for years 2–5; then +2 days every 5 years (2021 reform schedule). Prima vacacional: 25% bonus. Aguinaldo: minimum 15 days' salary by December 20. Sick leave: IMSS covers from day 4 (60% of SBC). Maternity: 84 days (42 pre/42 post — IMSS-funded). Paternity: 5 days employer-paid. Public holidays: 7 mandatory (Art. 74 LFT).
Without just cause: 3 months' integrated salary (liquidación) + 20 days/year of service + proportional aguinaldo/vacation/prima. Integrated salary includes base + proportional bonuses, commissions, and benefits. With just cause: proportional benefits only. Finiquito/liquidación process managed via Rippling with CFCRL conciliation compliance.
Annual ISR calculation (cálculo anual): employer reconciles ISR for each employee in January for the prior year. CFDI payroll XML archive: SAT requires retention of all stamped CFDI payroll receipts. Annual IMSS declarations. Rippling handles all year-end payroll filings and ISR reconciliation.
Statutory: IMSS enrollment (health, maternity, disability, life, nurseries); INFONAVIT (5% housing fund); AFORE/RCV (6.275% retirement); aguinaldo (15+ days' salary by December 20 — mandatory); prima vacacional (25% vacation bonus). Market standard: private medical insurance (seguro de gastos médicos mayores), food vouchers (vales de despensa — up to 1 UMA/day tax-exempt), fondo de ahorro (savings fund — 13% match), and performance bonus. Total statutory burden: approximately 30–38% above salary.
PTU (Participación de los Trabajadores en las Utilidades) requires employers to distribute 10% of pre-tax fiscal profits to eligible employees by May 31. Under the 2021 reform, individual PTU is capped at the higher of 3 months' salary or the employee's average PTU over the last 3 years. Rippling calculates and distributes PTU for all covered employees.
All Mexican payroll payments must be accompanied by a CFDI (Comprobante Fiscal Digital por Internet) — a digital payroll receipt stamped via the SAT portal (timbrado). Non-compliance is an audit trigger. Rippling generates and stamps CFDI 3.3 payroll receipts per pay cycle automatically.
Mexican employees receive a minimum of 12 days vacation after the first year (rising by 2 days per year for years 2–5), with a 25% prima vacacional bonus on top. The 2021 labor reform doubled the minimum from 6 days. Rippling tracks accrual and calculates prima vacacional automatically.
IMSS (Instituto Mexicano del Seguro Social) provides health, disability, maternity, life, and nursery benefits. Employers must enroll employees within 5 days of hire. Combined employer IMSS cuotas are approximately 17–20% of SBC. INFONAVIT (housing fund) adds 5%. Rippling manages IMSS affiliation and monthly SUA declarations.
