2025 Guide to Hiring Remote Software Engineers in Mexico
Mexico has emerged as a leading nearshoring hub for U.S. tech companies. It offers a large, skilled talent pool (700,000+ developers with ~130,000 tech graduates annually) at competitive rates. Mexican developers often have strong English skills and familiarity with U.S. work styles. Crucially, Mexico’s proximity and time-zone alignment enable real-time collaboration – you can work on CST/MST schedules and even meet in person without transcontinental flights. This nearshoring advantage delivers up to 40–50% cost savings on salary and benefits compared to U.S. rates.
source: levels.fyi
In practice, total compensation (salary + benefits) for a Mexican developer may be roughly half that of a U.S. counterpart. Moreover, Mexican culture is broadly compatible with U.S. corporate culture: teams value personal relationships and mutual trust, and Mexican workers tend to be highly motivated and loyal. For these reasons – cost efficiency, timezone overlap, bilingual talent, and shared cultural values – hiring remote software engineers in Mexico is a strategic win for U.S. companies.
Table of Contents
All Mexican employment falls under the Federal Labor Law (LFT). Contracts must be written (in Spanish) and include: employer/employee names & IDs, role & duties, workplace, hours, salary&pay period, probation (“periodo de prueba” up to 30 days, 180 for senior/technical roles), rest days, vacation, and aguinaldo. Contracts may be fixed-term or (more common) indefinite—any renewed or >1 year fixed-term is treated as indefinite. Employers must withhold taxes and social contributions, register hires with IMSS/INFONAVIT, and issue payslips/notices in Spanish. Failure to comply risks pro-worker labor-court penalties.
Mexican law strictly governs dismissals. For a “just cause” (e.g. fraud, violence, serious duty breach as defined in LFT Articles-47–51), employers can terminate with minimal liability, but these causes are narrowly defined. Otherwise, any dismissal is presumed unjustified, triggering statutory severance:
Total exit costs for long-tenured staff often exceed six months’ pay. Compensation above twice the minimum wage doesn’t increase capped components. Employers must notify the employee in writing, stating reasons; failure to prove just cause allows the worker to demand reinstatement or double severance. Always seek legal counsel before terminating. Resignations carry no severance beyond owed benefits, though notice is customary.
Since late 2020, any employee teleworking over 40% of their time must have a written, reversible agreement. Key requirements:
Remote staff retain all office-based rights (social security, holiday pay, etc.). It’s best to supplement the contract with a telework policy (internet sharing, cybersecurity, office-return process). Meeting these rules lets U.S. firms lawfully hire Mexican developers under remote-work terms.
Mexican law grants parental leave as follows:
These rules ensure U.S. employers can cost-effectively plan for Mexican remote hires while complying with local labor law.
Compared to US salaries, Mexican developer salaries are much lower, yet have been rising with competition. Recent surveys suggest a mid-career software engineer in Mexico earns on the order of MXN 350k–600k per year (roughly USD $18k–$32k). For example, PayScale reports an average base salary of MXN 425,954/year (about USD $24,000) for software engineers, with the 90th percentile near MXN 692k. Other industry data (see table below) indicates that senior developers in top cities often earn in the USD $45k–65k range per year. As a rule of thumb, Mexican software wages (plus mandated benefits) are roughly 50–60% lower than U.S. levels. For instance, one analysis shows total annual cost for a Cloud Engineer in Mexico of ~$77k vs ~$240k in the U.S..
source: payscale
source: economia
To budget for hiring, U.S. firms should convert pesos to dollars (currently ~17–20 MXN per USD) and factor in increases for inflation/market rates. Salaries vary by region – Mexico City and Monterrey tend to be higher than smaller cities. Common practice is to offer competitive compensation in Mexico terms, supplemented by bonuses or stock options if desired. Online platforms like Glassdoor and Payscale have city-specific reports, but local recruiters or employers often use compensation surveys (e.g. from recruiting firms) to benchmark. As a guideline, a mid-level Mexican developer in 2025 might expect $25k–30k USD annually, while a senior role might be $40k–50k USD.
In addition to salary, Mexico law prescribes two major mandatory “extra” benefits for all employees:
Employers should factor aguinaldo and PTU into total compensation. For a rough calculation, PTU adds about 0.96 weeks of pay on average (historical data suggests ~9.6 days per employee). Combined with aguinaldo, Mexican workers generally receive the equivalent of 3–4 weeks extra annually beyond salary. These payments are mandatory and failure to pay can result in penalties.
When you hire in Mexico, you must handle all payroll compliance:
Together, these add roughly 15%–17% on top of salaries. Non-compliance carries heavy fines, so many U.S. firms use Employer-of-Record or payroll providers (e.g. CloudDevs) to ensure full ISR and social-security compliance.
U.S. employers must also respect Mexican data privacy law. The Ley Federal de Protección de Datos Personales en Posesión de los Particulares (LFPDPPP) governs handling of personal data by private entities. In practice, this means any employee personal data (resumes, IDs, contact info, performance reviews, etc.) must be collected and processed lawfully. Mexican law requires the employer to issue a Privacy Notice to employees, informing them how their data will be used and secured. Sensitive data (health, union membership, etc.) requires explicit consent. Employers should limit data collection to what is strictly needed for employment and protect databases from unauthorized access. As one labor expert advises, companies must ensure they have up-to-date privacy notices for all employees and that data processing complies with Mexican law. In practice, handling Mexican personal data carefully protects both employee rights and the company’s legal compliance.
In Mexico, business relies on personal trust and respectful, indirect communication. Take time to build rapport—video calls or visits help—since deference to hierarchy and group consensus matter. Mexican professionals are hardworking and adaptable, often going the extra mile. While punctuality is valued, a few minutes’ grace in informal settings is normal. Simple Spanish courtesies (“buenos días,” using “usted”) foster goodwill. U.S. managers should lead with warmth, patience, and clear yet polite communication to strengthen team trust.
By default in Mexico, employees own their inventions unless a contract says otherwise. To secure your rights, include:
IP Assignment: State that all code, inventions, and software created within employment are company property, with the employee irrevocably assigning those rights.
Confidentiality/NDA: Standard non-disclosure terms meeting Mexican contract norms.
Note: Exceptional inventions may entitle employees to bonus compensation under labor courts. Mitigate this by specifying in the contract how any invention rewards or bonuses will be handled. A clear clause covering past, present, and future inventions ensures U.S. companies own IP developed by Mexican hires.
Even though the developers are remote, some projects may involve travel (for conferences, team meetings, or putting talent onsite). U.S. visa rules are strict: Mexican nationals need the proper visa to enter the U.S. or work here. For brief business trips (meetings, training, code reviews), a Mexican developer can apply for a B-1 business visa. This allows them to attend meetings or conferences but not to engage in actual work (code writing) on U.S. soil. If you need a Mexican engineer to perform work in the U.S. (e.g. an onsite hackathon or a longer assignment), you must secure an appropriate work visa.
Under the U.S.-Mexico-Canada Agreement (USMCA), many tech roles qualify for the TN visa. The TN (formerly NAFTA visa) lets Mexican professionals in certain occupations (engineers, scientists, IT professionals, etc.) work in the U.S. for a specific employer. TN status requires a bachelor’s degree (or credentials) in a qualifying field and a U.S. job offer. Alternatively, H-1B visas are available for specialized occupations but are limited in number. Without a work visa, a Mexican worker cannot legally code from within the U.S. All border crossings and travel must comply with immigration rules.
Conversely, when U.S. personnel travel to Mexico (for visits or management), they generally only need a valid passport and a tourist/work permit if their stay exceeds 180 days. Mexico does not currently require short-term visas for U.S. citizens. However, if a U.S. employee were to work while in Mexico (rare for remote arrangements), a Mexican work visa would be needed. In practice, U.S. companies should consult immigration counsel before scheduling any cross-border work trips.
Learn about hiring Mexican developers with CloudDevs here.
