PEO Services in Mexico

A co-employment model for companies that want to share the employer relationship in Mexico rather than hand it over entirely. Worth knowing up front: genuine co-employment has to sit outside the line Mexico’s outsourcing rules draw around personnel-supply subcontracting of a client’s core business activity, so we will confirm honestly whether PEO or an EOR fits your structure, and place you with the right vetted partner.

  • Independent advice
  • Vetted partners
  • Honest positioning

What a PEO does in Mexico

A Professional Employer Organisation works on a co-employment model. You and the PEO partner share the legal employer responsibilities for your Mexican staff: you keep direction and day-to-day control, while the partner administers payroll, tax withholding, social security contributions, and HR compliance under a shared arrangement.

01

Shared employer role

You and the PEO partner share the legal employer responsibilities. You keep direction and control; they handle payroll, tax withholding, social security contributions, and HR administration.

02

More direct control

PEO suits companies that want to retain more direct control of the employment relationship than a full EOR arrangement allows. In Mexico, genuine co-employment has to stay outside the REPSE (Registro de Prestadoras de Servicios Especializados) line that bans personnel-supply subcontracting of a client’s core business activity, so EOR is usually the simpler route unless your structure specifically calls for PEO.

03

Honest recommendation

For most companies hiring in Mexico, EOR is simpler. We work with you to determine your business needs and recommend honestly whether PEO genuinely fits your structure, or whether EOR serves you better.

How PEO works in Mexico, step by step

From assessing the fit to a compliant co-employment arrangement.

01 — Assess the fit

We map your structure, headcount, and how much control you want to keep, and recommend honestly whether PEO or EOR serves you better under Mexico’s rules. No product push.

02 — Set up co-employment

If PEO fits, we place you with a vetted, REPSE-registered Mexican partner and structure the shared employer arrangement correctly.

03 — Onboard your people

Compliant Mexican employment terms under the LFT (Ley Federal del Trabajo), with the administrative employer functions handled by the partner.

04 — Payroll & compliance

ISR (Impuesto Sobre la Renta) withholding, IMSS (Instituto Mexicano del Seguro Social) and INFONAVIT (Instituto del Fondo Nacional de la Vivienda para los Trabajadores) contributions, and statutory filings handled monthly, while you keep day-to-day direction.

What PEO in Mexico costs

As with EOR, there are two direct costs: the statutory cost of employment and the partner service fee. PEO carries a third consideration EOR doesn’t: co-employment means you and the partner share liability for the arrangement, and Mexico’s REPSE rules make how that liability is structured a genuine compliance question, not just a pricing one.

Employer social security (IMSS & INFONAVIT)

IMSS contributions of roughly 27 to 31%+ of the salario base de cotización (SBC, the wage base used for contribution purposes), plus INFONAVIT, a separate employer-only 5% housing-fund contribution, both administered under the shared employer arrangement.

Minimum wage (2026)

Two statutory zones: MXN 315.04/day (~MXN 9,582/month) generally, and MXN 440.87/day (~MXN 13,410/month) in the northern border free zone (ZLFN), both effective 1 January 2026.

Income tax (employee)

ISR withheld progressively across 11 brackets, 1.92% to 35%, with the current first-bracket ceiling at MXN 844.59 a month, calculated and withheld at source as part of the shared payroll administration.

PEO partner fee

A service fee for the co-employment administration, including keeping the shared-liability structure REPSE-compliant, not just running payroll. We benchmark across our vetted network, typically 15 to 25% below going direct.

Why arrange it through Bradford Jacobs

Why companies arrange Mexican PEO through us rather than going direct to a single provider.

We tell you if PEO fits your needs

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

Pricing you can’t get direct

We benchmark across our vetted network for rates typically 15 to 25% below going direct, factoring in Mexico’s IMSS and INFONAVIT employer contributions and REPSE-compliant structuring, and renegotiate for you at renewal.

  • 15-25% below direct
  • Network benchmarking
  • Renegotiated for you

Straight to the top when it matters

When something needs resolving, and in global employment it sometimes does, you come to us. We escalate directly, past the helpdesk, to people who can actually move it.

  • Direct escalation
  • No support queues
  • Named account contact

Two decades of placements

Two decades placing and managing employment arrangements across global markets, with the local knowledge that prevents costly Mexican compliance mistakes.

  • Co-employment expertise
  • Honest fit advice
  • Right structure

We flex as your structure changes

PEO, EOR, and your own entity sit on a spectrum, and the right point shifts as you grow. We advise on the path and manage the moves, EOR to PEO, or either to your own Mexican S.A. de C.V. or S. de R.L. de C.V., as your Mexican presence develops.

  • EOR, PEO or entity
  • Transitions managed
  • Right fit as you grow

What the LFT and IMSS still require under a Mexican PEO arrangement

Whichever model you use, the underlying Mexican rules are the same. Under a PEO arrangement, the administrative employer functions are handled for you.

Working time, leave & contracts

Compliant Mexican employment contracts and working-time rules, including the constitutionally mandated 48-to-40-hour workweek phase-in running 2026 to 2030 (48 hours unchanged through 2026, then one hour fewer stepping down each year with no pay or benefit cut allowed). ISR, IMSS, and INFONAVIT withheld and filed correctly. Statutory benefits, notice, and severance applied properly.

Statutory protections & exits

Statutory notice, probation, and the protections Mexican employees carry under the LFT, including the severance formula for unjustified dismissal: three months’ salary plus 20 days’ salary per year of service plus the prima de antigüedad (seniority premium), all handled under the shared arrangement. The value is the same as with EOR: the compliance is handled by people who do it daily. The difference is simply how much of the employer role you keep.

What a PEO arrangement covers in Mexico

The co-employment administration covers all of this, under one transparent fee.

Compliant contract

A compliant Mexican employment contract under the LFT, issued and maintained for you.

Payroll & filings

Monthly payroll run, with ISR, IMSS, and INFONAVIT calculated, withheld, and filed each month.

Statutory benefits

All statutory benefits administered: aguinaldo (Christmas bonus, minimum 15 days’ salary), prima vacacional (vacation premium), PTU profit-sharing, vacation, notice, and severance.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on how PEO co-employment works in Mexico.

What is the difference between PEO and EOR in Mexico?

With an EOR, the partner is the sole legal employer of your Mexican staff. With a PEO, you and the partner share the employer relationship, you keep more direct control, they handle the administration. In Mexico, genuine co-employment sits close to the REPSE line around personnel-supply subcontracting, so EOR is the usual route; PEO suits specific structures.

For most companies, EOR is simpler and faster, especially with no Mexican entity. PEO fits when you want to share rather than outsource the employer role, or have a structure that calls for it. We work with you to determine your business needs and recommend the best solution.

It depends on the structure. Some co-employment arrangements assume or work alongside your own S.A. de C.V. or S. de R.L. de C.V. If you have no entity and want none, EOR is usually the cleaner route. We will confirm which applies to you.

The administrative employer functions, payroll, ISR, IMSS, INFONAVIT, statutory benefits, and statutory filings, are handled by the partner. We make sure the arrangement is structured through a REPSE-registered provider so responsibilities are clear and Mexican law is met.

The statutory employer cost (IMSS and INFONAVIT contributions) plus a partner service fee for the co-employment administration, which also covers keeping the shared-liability structure REPSE-compliant. We benchmark across our network for pricing typically 15 to 25% below going direct.

Yes. These models sit on a spectrum and the right one changes as you grow. We advise on the path and manage transitions, EOR to PEO, or either to your own S.A. de C.V. or S. de R.L. de C.V., as your Mexican presence develops.

Not sure whether PEO or EOR is right for Mexico?

Tell us your structure and headcount and we will give you an honest recommendation, usually within a day, plus pricing you will not get direct. No product push, just the right fit.

Tax and labour data verified July 2026 (SAT, IMSS, DOF). Figures change; we confirm the current position when we scope your hire.