Linx Team · 09/15/2025
Mexico's social security system is comprehensive—and for foreign employers, it can be overwhelming. Between IMSS (health and disability), INFONAVIT (housing), and SAR (retirement savings), employer contributions can add 25-30% on top of base salary. Here's what you need to know to budget accurately and stay compliant.
The Instituto Mexicano del Seguro Social (IMSS) covers health insurance, disability, maternity, and work-related injuries. It's mandatory for all formal employees, and employer contributions are substantial.
Every employer in Mexico must contribute 5% of each employee's salary to INFONAVIT, the national housing fund. Employees can use these funds for home loans or withdraw them upon retirement.
The Sistema de Ahorro para el Retiro (SAR) is Mexico's mandatory retirement savings system. Contributions go into individual accounts managed by private AFORE fund managers.
If you're hiring in Mexico without a local entity, you need an EOR partner who handles all social security registration and contributions. Here's what to watch for.