PEO Mexico services
for your local workforce
Professional Employer Organization services for companies setting up operations in Mexico. We co-employ your workforce and manage all local payroll, benefits and compliance obligations directly.
What is PEO in Mexico
A PEO (Professional Employer Organization) is a co-employment arrangement where ADN Services becomes the employer of record for your Mexico-based employees for payroll and compliance purposes. Your company retains full control over job functions, performance management and day-to-day work direction.
The PEO model is particularly useful when:
- You are setting up Mexico operations and do not yet have a local entity
- You want to hire Mexico employees quickly without waiting for entity formation (2-8 weeks)
- You need to test the Mexico market before committing to a full legal entity setup
- You want to reduce administrative complexity while staying fully compliant
What ADN covers under PEO
- Employment contracts under Mexican Federal Labor Law (LFT)
- IMSS employer registration and monthly social security filings
- INFONAVIT housing fund contributions
- CFDI 4.0 electronic payroll receipts
- ISR income tax withholding and annual reconciliation
- Mandatory benefits: aguinaldo, vacaciones, prima vacacional, PTU
- REPSE registration for specialized service agreements
- Employee terminations: finiquito and liquidacion calculations
- Monthly English-language compliance reports for your HQ
PEO Mexico vs setting up your own entity
| Factor | PEO with ADN | Own Mexican Entity |
|---|---|---|
| Time to first hire | 5 business days | 4-8 weeks (entity setup) |
| Setup cost | Low (no legal entity fees) | $3,000-$8,000 USD notary + setup |
| Ongoing admin | ADN handles all local compliance | Requires local CFO or outsourced accounting |
| REPSE coverage | ADN's active REPSE registration | You need to register separately |
| Control over employees | Full operational control | Full operational control |
| Best for | 1-30 employees, market testing, speed | 30+ employees, long-term operations |
Frequently asked questions
How quickly can you onboard our Mexico employees under PEO?
5 business days for standard cases. We need: employee personal data (RFC, CURP, bank account), agreed compensation structure and job description. We prepare the employment contract and handle IMSS registration.
What is the typical cost of PEO in Mexico?
PEO fees are a fixed monthly amount per employee, typically ranging from $150 to $350 USD depending on payroll complexity and number of employees. Mandatory employer costs (IMSS, INFONAVIT, mandatory benefits) pass through at actual cost. Contact us for a specific quote based on your headcount and salary structure.
Can employees transition to our own entity later?
Yes. When you are ready to move to your own entity, we manage the transition. Employees' labor seniority is preserved in the transfer. It typically takes 30-60 days to complete the transition cleanly.
Mexico mandatory benefits you need to plan for
Under PEO, we administer all mandatory benefits on your behalf. Here is what Mexican law requires and what to expect cost-wise:
- Aguinaldo (Christmas bonus): minimum 15 days of salary, paid before December 20 each year
- Vacation days: 12 days in year 1, increasing by 2 days per year up to 20, then 2 more days every 5 years
- Vacation premium (prima vacacional): 25% of vacation day salary, on top of the vacation pay itself
- PTU (profit sharing): 10% of pre-tax profit distributed among employees, calculated annually
- IMSS employer contributions: approximately 20-25% of salary depending on risk classification
- INFONAVIT: 5% of base salary for housing fund
We include all of these in the total cost modeling we provide when you request a quote. No surprises.
Related services
- Payroll outsourcing Mexico: if you already have a Mexican entity
- EOR Mexico alternative: positioning vs global SaaS EOR providers
Hire in Mexico in 5 business days
PEO setup. REPSE registered. Full compliance from day one. Direct contract with our local Jalisco team.