Paying Mexican Workers on a Daily Rate: Legal Framework and Compliance Tips
For many foreign companies expanding operations or hiring remote staff in Mexico, one payroll-related decision often arises: Should we pay employees daily, weekly, or monthly?
While daily wage structures are legal in Mexico, they come with strict regulations, and employers must understand their legal, tax, and social security implications before implementation.
Daily Pay Is Legal — But Not Always Simple
Under Mexico’s Federal Labor Law (Ley Federal del Trabajo), it is legal to structure employee compensation on a daily wage basis (sueldo diario), especially for roles traditionally associated with hourly or manual labor (e.g., construction, retail, agriculture).
However, even when paying daily, workers must still receive the full range of mandatory benefits, including:
- Paid rest days
- Public holidays
- Overtime pay
- Vacation days and bonuses
- Aguinaldo (Christmas bonus)
- PTU (profit sharing)
Paying a daily rate does not exempt employers from these obligations — and failure to comply can result in severe penalties.
Tax and Payroll Reporting Requirements
Even if you pay a daily rate, you are still responsible for:
- Registering the employee with IMSS (social security)
- Calculating contributions based on their integrated daily salary (which includes benefits)
- Issuing CFDI payroll receipts in accordance with SAT (Mexican tax authority) rules
- Ensuring minimum wage compliance, both nationally and regionally
Additionally, daily wage earners must still receive their pay at least weekly (per Article 88 of the LFT), unless they are in administrative or managerial roles, which may justify a bi-weekly or monthly cycle.
Common Misconceptions
| Myth | Reality |
|---|---|
| “Daily pay is for informal jobs only.” | False — it’s used in formal contracts, especially for blue-collar roles. |
| “You don’t owe Aguinaldo if you pay daily.” | False — Aguinaldo is mandatory regardless of pay structure. |
| “We can avoid long-term obligations with daily contracts.” | False — continuity of service creates obligations under labor law. |
When Daily Pay Makes Sense
Paying daily wages can make sense when:
- The work is seasonal or project-based
- Laborers work irregular hours
- The business model requires flexibility in scheduling (e.g., logistics, hospitality)
- The worker prefers that structure and signs an agreement acknowledging it
Even then, all agreements must be:
- Written in Spanish
- Registered properly
- Fully compliant with Article 25 of the LFT
Legal Risks to Avoid
Failing to handle daily payroll correctly can trigger:
- Fines from the STPS and IMSS
- Lawsuits for unpaid benefits or misclassification
- SAT audits for incorrect or missing CFDIs
- Reputation damage in the local labor market
It’s especially risky if you attempt to disguise full-time employees as independent contractors paid by the day — a red flag for labor inspectors.
Best Practices for Foreign Employers
- Define the daily rate clearly in the employment contract, along with payment frequency and benefits.
- Calculate the Integrated Daily Salary (SDI) to ensure proper social security contributions.
- Issue digital payslips (CFDI de nómina) on time, even for short-term contracts.
- Use a local payroll provider or Employer of Record (EOR) to ensure accuracy.
- Avoid mixing pay models unless justified — e.g., paying some roles daily and others monthly requires consistent logic and documentation.
Final Thoughts
While paying Mexican workers a daily rate is fully legal, it must be handled with care and full compliance. The flexibility it offers can be a strategic advantage — but only when supported by proper contracts, tax reporting, and social security registration.
If your company is expanding in Mexico or hiring remote talent, be sure your payroll approach aligns with local law — or partner with a local expert who can help you navigate the rules safely.
