Disclaimer: This article is not a substitute for legal nor accounting advice. Look for professional advice before you take action.
Mexico plays host to many thriving industries. It has invested in creating a talent pipeline from secondary education. This has resulted in a diverse and strong tech sector overflowing the country, with talent attractive to U.S. employers for remote hiring.
There is an ever increasing demand from US employers looking for developers in Latin America and specially in Mexico to source talent and fill senior software developer positions.
Although Mexico has been developing several tech parks such as Monterrey Technology Park, Apodaca Technology Park, and Guadalajara Software Center, many Mexicans like you seek to fulfill their lifelong dream of working for a US company.
Many startup companies are sought after by developers who are eager to grow at a fast pace working in the mecca of technology and entrepreneurship. Luckily, communication innovation and globalization have shortened distances between Latin American talent and US startups making that dream job that seemed mythical and out of reach, quite possible to get.
If you have read up to here, it means you are interested in working for a US company and quite eager to fulfill your dream. You are ready to face new challenges and learn from the greatest minds in the world. But, surely you are concerned about compliance and the legal obligations that come with working remotely. We have summarised for you all the information you need to know, keep reading!
What concerns will I have working for a US company from another country?
As a remote worker providing your talent and services to a US based company but from your country of origin, you will have several advantages with respect to work visa requirements and costs of living. However, this does not exempt you from maintaining compliance with Mexican labor laws and regulations.
As a Mexican working in Mexican territory, you will still have to file and pay taxes in your country and most likely produce invoices for your employer. Another, more minor concern, will be establishing working hours, since under Mexican law you are only allowed to work 48 weekly hours, and taking into account the time difference.
What are the tax implications of being a remote worker in Mexico?
You may be wondering if you will have to pay US taxes. The answer, you will be glad to hear, is no. Since you will be working from your home country, you are only liable for Mexico’s taxes. If you want to learn more about labor laws in Mexico you can consult the Federal Labor Law.
You will be liable to pay for the ISR (impuesto sobre la renta) which is a direct tax applied directly as a percentage of your income gain. It is a progressive tax that charges a higher percentage on those who earn more. The rates range between 1,92% and 35%. If you would like to know what rate would apply to your gross salary you can consult this link to access a detailed table that shows how the percentages escalate or you can enter your salary into this calculator to understand what percentage applies to you. Senior software developer specialists in Mexico with 5 to 9 years experience earn around USD 72,000 gross salary.
The SAT (servicio de administración tributaria) is the entity in charge of giving you your RFC (Registo Federal de Contribuyentes) number which you will need to pay taxes. Before getting your RFC number make sure you have previously obtained your CURP (Clave Única de Registro de Población). All Mexican citizens have their CURP, which is a general identification number.
What benefits will I be entitled to as an independent remote team member?
At Nexton we connect talent with US companies to work under independent work contracts. There are many benefits of this form of work relationship. As a remote team member under an independent contract you will be paid on a monthly basis a fixed salary and will not need to use Online Business Payroll Services to keep track of the amount of hours put in, nor have to give an account of the work you have done in those hours.
As an independent contractor, you will be responsible for withholding business payroll taxes, and setting up the legal form that allows you to provide services to others. This includes adding a 16% VAT to the services you provide. However, you will be entitled to paid time off and you will have more freedom to choose your working hours.
Will I need a VISA to work for a US company as a remote worker?
The internal revenue service (IRS) established that only people working within US territory require a work visa. So as a Mexican working from your home country for a US company, you will not need a work visa or permit to provide your technical services to your employer.
This we know is a great relief since obtaining such visas can be tricky, time consuming and oftentimes frustrating. By working as a remote team member you get all the benefits of working for challenging companies without having to leave your country behind.
Is it easy for me to get paid in mexico?
The government of Mexico establishes that Mexicans must get paid in Mexican pesos through government approved banks. Employees may convert their salaries afterwards but cannot receive payment in American dollars.
We have developed a list of transfers payment options for your convenience for you to be able to compare and decide which is the best option for you:
You can set up an account specifically for payroll receipt. The employer deposits the money in the account and you can spend it through a bank provided debit card. For a full range of banking services you will need to open a personal-use bank account of your choice. This payment through bank transfer is secure and fast but usually comes attached to higher fees and commissions than other forms of payment.
Directo a Mexico:
Another quite common and useful form of payment is Directo a mexico. This is a service to send money from an account in a financial institution subscribed to the service in the United States, to any bank account in Mexico. Their benefits include competitive pricing, low commissions, transparency in the exchange rates applied, and their infrastructure is monitored by the Federal Reserve Bank and Bank of Mexico to ensure safety.
Many workers, specifically those carrying out their tasks remotely, use these to get paid working in Latin America. These platform options make online payroll payments for remote workers easier.
- PayPal is widely trusted and allows you to track the status of every transaction. It allows you to be notified when a payment is received, it is easy to set up and as a recipient you don't pay any fees.
- Payoneer allows you to register an account and even apply for a debit card. It is a fast way of receiving money and they provide full customer service support. But it charges a fixed fee of $3 to the recipient for each transaction.
- Wise is known to have the lowest transaction fees. And if you set up as a contractor its integrated tools such as QuickBooks and Xero can make account record keeping and invoicing easier.
- If you prefer being paid in cryptocurrency, then Bitwage is a better option. It is however quite costly but it supports payments in Bitcoin, Ether and USD Coin.
Our role at Nexton
There is great competition for software engineers and senior software developers and their specialist skills. And this work demand continues to increase. At Nexton we connect talent with US companies to help Mexican senior developers show off their knowledge and work attitude.
Our job is to make sure your talent is seen, valued and paid appropriately. We guide you through the interview process and solve any doubts you may have. Our purpose is to make your dream job at a US company a reality. Contact us to tell us more about your dream.