Outsourcing to Mexico but not sure how much you should pay a Mexican employee?
Or just want to know what the average salary in Mexico is?
You’re in the right place!
In 2021, the average salary in Mexico is around 33,200 MXN per month.
While this is higher than the average salaries in popular outsourcing destinations like India and the Philippines, it’s much lower than in developed countries like the US and the UK. That’s why outsourcing to Mexico could be the right move for businesses looking to grow quickly.
This Article Covers:
(Click on a link below to jump to a specific section)
- What is the Average Salary in Mexico?
- Top 4 Industries to Outsource to Mexico
- 4 Key Benefits of Outsourcing to Mexico
Let’s get started.
What is the Average Salary in Mexico?
The average base salary in Mexico varies drastically across different sectors like IT, manufacturing, healthcare, etc., like any other country.
The salary range also depends on various factors like education level, years of experience, and work type (permanent, contract, or part-time).
After considering the above factors, a Mexican worker usually earns an average annual salary of 3,98,400 MXN (Mexican Peso). According to the exchange rate in 2021, this amounts to USD 19,980 annually.
Generally, the average salary ranges from 8,410 MXN (lowest salary) to 1,48,000 MXN (highest national average) per month.
Additionally, Mexico’s salaries also differ from one city to another.
The average salary in Mexico City, Guadalajara, and Monterrey is about 44,600 MXN, while it’s around 38,900 MXN in Cancun.
In terms of an hourly wage, the average income of a Mexican worker in the manufacturing industry is around USD 3.50/hour.
Let’s now explore the various aspects of the average salary in Mexico.
A. Median Salary
The median salary in Mexico is 32,600 MXN (USD 1,660/month).
Median salary represents the middle value of a set of salaries. It means that half of the working population earns more than the median salary (USD 1,660), while the other half earns less than the median salary.
B. Average Annual Salary Increase
Employees in Mexico generally get an increase in their monthly salary every 18 months (the world’s average salary increment is 3% every 16 months).
The increment is usually around 8% of their annual salary.
1. Average Annual Increase by Industry
Here is the average annual increase in salaries across different industries:
|Industry||Average Annual Increment|
2. Average Annual Increase by Experience
Let’s check out the average annual increase in salaries by experience level:
|Experience Level||Average Annual Increment|
Note: The figures provided here are averages of numbers and should only be taken as general guidelines. Salaries and increments will vary from person to person and depend on many factors, as discussed above.
C. Salary Comparison by Education
In most cases, higher education leads to a higher average income.
Based on the surveys by salaryexplorer.com, employees with a Bachelor’s degree generally earn 24% more than diploma holders. And working professionals with Master’s degrees are often paid 29% more than Bachelor’s degree holders.
Additionally, Ph.D. holders usually receive a 23% higher wage on average than Master’s degree holders. Essentially, the more qualified a candidate, the higher their salary.
Note: Changes in salary based on education vary across locations and also depend on the career field.
D. Salary Data for Different Professions
Here’s Mexico’s income per capita broken down by profession:
|Profession||Average Salary (per month)|
|IT Manager||40,000 MXN|
|Data Analyst||18,632 MXN|
|Project Manager||36,594 MXN|
|Business Development||34,000 MXN|
|Software Engineer||30,000 MXN|
|Interior Designer||22,653 MXN|
|Content Marketing||19,376 MXN|
|Fashion Designer||25,305 MXN|
|Customer Support||15,319 MXN|
|Teacher’s Salary||15,447 MXN|
|Mechanical Engineer||24,797 MXN|
|Chemical Engineer||56,632 MXN|
|Marketing Manager||44,937 MXN|
|Human Resource Manager||59,475 MXN|
|Senior Financial Analyst||38,249 MXN|
|Solution Architect||59,649 MXN|
E. Daily Minimum Wage (Minimum Salary Bill)
The minimum wage is the minimum amount an employee receives each workday.
In 2021, the Mexican government decided to increase the daily minimum wage to 141.70 MXN (USD 7.10). Previously, Mexico’s minimum wage was 123.22 MXN (USD 6.14).
The 15% increase in the minimum average wage is intended to increase the purchasing power of daily wage workers and meet international standards. The new national minimum wage law came into effect on Jan 1, 2021.
Now that we have covered various aspects of the average salary in Mexico, let’s see how this influences outsourcing to Mexico.
Top 4 Industries to Outsource to Mexico
For decades, US-based companies have been outsourcing their business operations to Mexico — also called nearshoring.
But it isn’t just for American companies. Outsourcing to Mexico can help businesses from other countries cut costs and remain competitive.
Here are the four most common outsourced industries in Mexico:
1. Manufacturing and Production
While Asia is well known for outsourced manufacturing due to cheap labor, Mexico isn’t far behind.
A manufacturing employee in Mexico usually earns around 22,700 MXN per month (USD 1135.75). Compared to an Asian country like China — where a manufacturing employee typically earns 20,000 CNY per month (USD 3092.05), Mexico can feel more expensive.
But when you consider productivity and transportation costs, American companies can recognize the benefit of outsourcing to Mexico.
For instance, items manufactured in Mexico can be quickly shipped and transported to the US at lower costs. Mexico also allows duty-free imports from the US in its free trade zones — you can import raw materials in the duty-free zone without paying any income tax for them.
Additionally, the government will provide you with real estate at a low rate if you create enough jobs for locals.
2. Customer Service
With a population of over 127 million, Mexico is the second-largest economy in Latin America after Brazil. Mexico offers a large talent pool of call center agents, having excellent English and Spanish speaking abilities.
The BPO (Business Process Outsourcing) industry in Mexico is valued at approximately $2.4 billion (US dollars). The geographical proximity and similar time zones of Mexico to the US make it easier to cater to US time zones.
Additionally, an individual working in customer service or call center operations in Mexico usually earns around 22,800 MXN per month (USD 1140.84) — compared to US-based agents who typically are paid around USD 5500 per month.
3. Software Development and IT
The Mexican government has put STEM (Science, Technology, Engineering, and Mathematics) education at the center of its efforts to promote jobs in the technical department. It has also made technological infrastructure improvement a national priority.
Moreover, the shortage of technical talent in the US has driven up software development costs.
That’s why it makes even more sense for companies to outsource their software development operations to Mexico at a low average cost (an employee in software development/IT is typically paid about 33,400 MXN per month) and still get quality service.
4. Human Resource (HR) Services
If you’re already running operations in Mexico, you can take advantage of the HR and payroll services with a local provider. Usually, an HR professional is paid around 31,400 MXN per month.
You can also streamline processes by outsourcing your payroll and recruitment operations to Mexico.
The delegation of payroll and recruitment services through a third party (also known as Professional Employer Organization) is common among US-based companies.
A foreign company hiring Mexican workers through Professional Employer Organization (PEO) must comply with social security and tax obligations. Some of these obligations include Christmas bonuses and free health care for your employees, irrespective of the job title.
Top 4 Benefits of Outsourcing to Mexico
Here are some of the advantages of outsourcing to Mexico:
1. Low Wages and Operational Cost
The low labor costs and low cost of raw materials in Mexico are two major reasons for outsourcing to Mexico.
Due to lower living expenses, employee salaries in Mexico are only a fraction of the average labor cost in the United States. The cost of living in Mexico is 70% less than their American counterpart and 44% less than a European country like Spain.
Moreover, internet costs in Mexico are approximately 140% lower, and rent is 400% less than in the US in some cases, so your operational expenses will be significantly lower.
All these operational costs add up to significantly improve your company’s bottom line.
2. Similar Time Zones to North America
North American companies can experience smoother travel, transportation, and communication with their Mexican operations.
Moreover, Mexico’s strategic location and large coastline mean that you can directly ship to global markets like Asia and Europe.
Mexico also has the added advantage of being in the same time zone as the United States.
In most cases, the work hour timings of the Mexican employees match the standard work hours of the employees from North America — making collaboration a lot easier.
3. Highly Skilled Workforce
The Mexican government has made it a priority to invest in the education and training of its workforce after leaving school.
From 2009 to 2015, the number of graduates in engineering, manufacturing, and construction fields has almost doubled. The number increased from 60,000 in 2009 to 1,14,000 in 2015.
According to a 2018 survey, Mexico has the second most number of software engineers among Latin American countries, only behind Brazil. This has created a huge influx of Mexican graduates ready for a job.
According to the labor statistics firm INEGI (National Institute of Statistics and Geography), the unemployment rate decreased from 5.6% in May 2009 to 4.1% in May 2021.
4. Business-Friendly Government
The duty-free import, tax credits, and financial incentives signify support from the Mexican government to foreign companies. These business-friendly policies helped boost the already booming manufacturing industry.
While government negotiations can be tricky for foreign companies, Mexico has traditionally been very welcoming to foreign companies that create jobs for the youth.
Due to the flourishing startup environment in Mexico, it received almost one-quarter of all VC (Venture Capital) investment in Latin America (including South and Central America) in 2017.
Additionally, the Mexican government passed a law in 2018 to regulate the fast-growing fintech market in the country. This has led to positive growth in the fintech sector in Mexico.
Mexico also has strong legal protection for intellectual rights in its policies — you can rest assured that your company’s registered trademark and patents are protected.
For more information, read our ultimate guides on:
- Nearshoring to Mexico in 2021: Benefits, Challenges, and Solutions
- Outsourcing to Mexico in 2021: Benefits, Challenges, Tips
If you’re looking to outsource to Mexico, the lower average salary compared to the US and UK makes it a suitable destination for all your outsourcing needs.
But lower salaries are just one benefit. You also have several government initiatives, availability of skilled workforce, and time zone similarities with the US that make outsourcing to Mexico even more attractive.
Use the information we provided here to understand the average salaries in Mexico and if outsourcing to Mexico is the best move for your business.
Lauren Soucy is the VP of Marketing for Time Doctor, the world’s leading time tracking and productivity software. She has 15+ years of experience in marketing at fast-paced companies. Her first passion is SEO, she can’t start her day without coffee, and she enjoys spending time at the beach with her two boys and her husband.