Summary

The Mexican social security system provides a broad range of coverage for retirement, disability, medical care, sickness, occupational injury and maternity. Benefits are typically low, however, and few expatriates access them in practice.

Details

Contributions

The maximum total employer contribution to the three core elements of social security are approx. $11,000 per year (the exact level depends on the industry of the employer), with employee contributions of approx. $1,500. These contributions apply to individuals with annual income of above $54,000.

Treaties

Mexico has only two social security agreements (with Canada and Spain). The agreement with the US which was signed in 2004 has never come into force. Contributions will therefore be due for most employees moving into Mexico from abroad.

Exemptions

Social Security in Mexico is generally applied to taxable income. Providing individuals with certain tax advantaged allowances (education, medical allowances etc) may therefore generate social security savings.

Administration

All contributions are paid over via monthly payroll for employed individuals.

Benefits

Contributions to the pension element of social security create a personal account balance which can be used to buy annuities at retirement. The personal account can also be accessed in the case of unemployment.

Other

Social Security contributions may be refundable for those leaving Mexico permanently. The law is still fluid in this area and is based on court decisions in 2020 and 2021 and claims, if allowed at all, may be limited to some geographical areas.

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