Key Concepts for Calculating Social Security in Mexico

When calculating Social Security contributions in Mexico, it's essential to understand three critical elements:

1. The Base Listed Salary (BLS) of the employees.

2. The Measurement and Updating Unit (UMA).

3. The current minimum wage in Mexico.

Understanding the Base Listed Salary

According to Article 27 of Mexico’s Social Security Law, the Base Listed Salary (BLS) is the foundation for determining employee benefits. This salary must include all mandatory employee benefits, such as vacation pay, vacation premium, and the Aguinaldo (Christmas bonus).

Key points to consider:

- Christmas Bonus: Employees with more than one year of service are entitled to a Christmas bonus of at least 15 days’ salary.

- Vacations: Employees earn 12 days of paid vacation after one year of service, with an additional two days for each subsequent year until the fifth year. After that, the vacation period increases by two days every four years.

- Vacation Premium: Employers must pay an extra 25% on top of the regular salary during vacation periods.

The Measurement and Updating Unit (UMA)

The Unidad de Medida y Actualización (UMA) serves as an economic reference point, adjusted annually in line with inflation. The National Institute of Geography and Statistics (INEGI) determines the UMA, which is used in various financial calculations, including social security contributions.

For 2023, the daily UMA is MXN $103.74 (approximately USD $5.50), and the monthly UMA is MXN $3,153.70 (about USD $167.20). The maximum Base Listed Salary allowed for social security purposes is capped at 25 UMAs.

Minimum Wage in Mexico

Mexico's minimum wage varies depending on the region. The country has a standard minimum wage and a higher rate for the northern border area to discourage workers from migrating to the United States. The minimum wage is crucial for several legal calculations, including the employer's contribution to the Advanced Age Severance fee.

As of 2023, the general minimum wage is MXN $248.93 (USD $14.83), while the northern border minimum wage is MXN $374.89 (USD $22.34).

Advanced Age Severance Fee

A significant update in Mexico's Social Security Law took effect on January 1st, 2023, altering how the employer’s Advanced Age and Severance fee is calculated. This fee is tiered based on the employee's salary, with the percentage ranging from 3.15% to 11.88%. For example, if an employee’s daily BLS is MXN $360.73, the applicable fee is 9.57%.

How to Calculate Social Security Contributions in Mexico

To calculate social security contributions for an employee, you first need to determine the risk premium based on the type of work performed. For administrative tasks, the risk premium falls under Class I, with a rate of 0.54355%.

Next, calculate the surplus fee for the Disease and Maternity Insurance. With these components in place, you can calculate the total contributions for both the employer and the employee.

For instance, with a monthly BLS of MXN $10,821.92, the social security contributions might look as follows:

- Company Contribution: MXN $2,997.32

- Employee Contribution: MXN $262.46

Conclusion

In Mexico, social security is a fundamental right for employees, requiring contributions from both the employer and the employee. These contributions are calculated based on the employee’s Base Listed Salary and, in certain cases, the current UMA. Understanding these components ensures accurate and compliant calculations of social security obligations.

Master Mexico's Social Security Contributions

Understanding Mexico's UMA, minimum wage, and social security base salary calculations is critical for compliant payroll. Remoly's Mexico EOR service handles all IMSS contributions and payroll reporting.

Need Help Navigating Global Employment? Remoly provides EOR and global payroll services covering 100+ countries. Our global employment experts offer real-time compliance support and localized solutions. Contact Us for a Free Consultation Remoly — Your Global EOR & Employer of Record Partner Serving 100+ Countries & Regions Worldwide * This article is for informational purposes only and does not constitute legal advice. For specific compliance guidance, consult a qualified professional. Related Articles Compliance Ultimate Guide to Registering Your Address in Germany: Everything You Need to Know Read More Compliance Scaling as a Freelancer: Removing Payment Friction Read More Compliance Mastering Payroll Stub Creation: A Comprehensive Guide for HR Efficiency and Accuracy Read More Easy to start, intuitive to use "I love Remoly, our very own collaboration tool that makes interacting with my team members so easy, effective, and fun. It's intuitive and can do so many things all from one place.❤️“ Employer Branding Manager Internet, 10,000+ Employees "Makes Google Workspace look anachronistic." Google play Review “It's become a real go-to staple.” Google play Review "Holy Smoke, Lark has an insane feature line-up offerings from the get-go." Google play Review "I would suggest people try this app, which gives you a feel way beyond other apps in place." Google play Review "Once my teammate suggested using Discord instead of Flock or Slack. But we realized Lark is much better among all." Google play Review Easy to start, intuitive to use "I love Lark, our very own collaboration tool that makes interacting with my team members so easy, effective, and fun. It's intuitive and can do so many things all from one place.❤️" Employer Branding Manager Internet, 10,000+ Employees "Makes Google Workspace look anachronistic." Google play Review “It's become a real go-to staple.” Google play Review "Holy Smoke, Lark has an insane feature line-up offerings from the get-go." Google play Review "I would suggest people try this app, which gives you a feel way beyond other apps in place." Google play Review "Once my teammate suggested using Discord instead of Flock or Slack. But we realized Lark is much better among all." Google play Review Remoly, bringing it all together All you need is the Internet and Remoly. Request Demo Product Employer of RecordContractor PaymentGlobal PayrollGlobal MobilityBackground Check Resources BlogKnowledge BaseSalary CalculatorGlobal Holiday CalendarHelp Center Security Private PolicyTerms of Service Company About UsPartnershipContact Us © 2026 Remoly. All rights reserved. English Remoly is not a licensed financial institution or bank and does not directly handle or process payments. All payment transactions are securely managed by our regulated partner, Airwallex. Funds Protection In the UK: Provided by Airwallex (UK) Limited, an authorised Electronic Money Institution regulated by the Financial Conduct Authority (FCA) under FRN: 900876. Customer funds are safeguarded in accordance with FCA rules, kept separate from Airwallex's own funds. In the EU: Provided by Airwallex (Netherlands) B.V., an authorised Electronic Money Institution regulated by De Nederlandsche Bank (DNB) under licence number R179622. Customer funds are safeguarded in accordance with Dutch regulatory requirements, kept separate from Airwallex's own funds. Learn more about how funds are safeguarded → click here   As Merchant of Record, Remoly acts as a compliant intermediary: We issue VAT-compliant invoices on your behalf and enable seamless, regulation-friendly payouts to freelancers worldwide — without requiring them to register a local business entity.