---
title: "Contractor vs Employee in Mexico — Geo-Parity"
description: "At $100/hr in Mexico, contracting nets more than employment. Break-even around $83/hr. Compare net take-home, effective tax and the rate you need to charge."
canonical: "https://geo-parity.com/contractor-calculator/mexico/"
json: "https://geo-parity.com/api/contract.json?country=MX&contractorRate=100&employeeRate=70&hours=40"
generator: geo-parity markdown twin
---
Contracting · Mexico

# Contractor or employee in 🇲🇽 Mexico?

At **$100/hour**, contracting nets more than employment — the break-even rate is about **$83/hour**.

## Side by side at $100/hour

|  | Contractor | Employee |
| --- | --- | --- |
| Gross | $192,000 | $145,600 |
| Tax | $49,920 | $29,120 |
| Health insurance | $1,500 | — |
| Net | $140,580 | $116,480 |
| Effective rate | 27% | 20% |

ISR; the RESICO turnover-based regime can slash it for small earners. Run your own rate in the [interactive calculator](https://geo-parity.com/contractor-calculator/?country=MX).

## To take home $100,000 a year

You need to charge about **$95/hour** (day rate **$762**), billing **1440** hours across the year for **$137,162** of gross revenue.

Change the target in the [required-rate calculator](https://geo-parity.com/contractor-calculator/?tab=rate&country=MX).

## Checked against the OECD

This page uses an employee rate of **20%**. The OECD's Taxing Wages series independently puts income tax plus employee social contributions at **13.2%** of gross pay for a single person on the average wage in 2025 — and the full tax wedge, which adds what the employer pays on top, at **21.6%** of total labour cost.

The rate above is checked on every build against the range OECD measures across earnings from two-thirds of the average wage to two-thirds again above it, and a figure outside that range fails the build. The two are not expected to match exactly: this site carries one blended rate where a real system has brackets.

## Countries with a similar contracting premium

- [🇩🇰 Denmark](https://geo-parity.com/contractor-calculator/denmark/) — +19% for contracting
- [🇳🇱 Netherlands](https://geo-parity.com/contractor-calculator/netherlands/) — +19% for contracting
- [🇹🇷 Türkiye](https://geo-parity.com/contractor-calculator/turkiye/) — +19% for contracting
- [🇦🇷 Argentina](https://geo-parity.com/contractor-calculator/argentina/) — +19% for contracting

## Questions

- **Is it better to contract or be employed in Mexico?**: At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in Mexico: a contractor keeps about $140,580 against an employee's $116,480, a difference of $24,100. The break-even rate — where the two are equal — is about $83/hour. ISR; the RESICO turnover-based regime can slash it for small earners.
- **What hourly rate do I need to charge in Mexico?**: To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $95/hour, or a day rate around $762. That assumes $137,162 of gross revenue across 1440 billable hours.
- **Why is the contractor tax rate in Mexico different from the employee rate?**: A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 27% effective for a contractor against 20% for an employee. ISR; the RESICO turnover-based regime can slash it for small earners.
- **How accurate are these Mexico figures?**: The employee rate used here is 20%. The OECD's Taxing Wages series independently reports 13.2% of gross pay going to income tax plus employee social contributions for a single person on the average wage in 2025, and 9.6%–17.1% across earnings from two-thirds to two-thirds again above that. The rate here is checked against that range on every build and a figure outside it fails. It is still one blended rate where a real system has brackets, so treat it as an estimate: your actual liability depends on your regime, deductions and region.

Estimates for comparison, not tax advice. Effective rates are blended, not bracket-by-bracket except where noted, and every country has regimes and deductions a single rate cannot express.

---

Source: Geo-Parity — https://geo-parity.com/contractor-calculator/mexico/ · JSON: https://geo-parity.com/api/contract.json?country=MX&contractorRate=100&employeeRate=70&hours=40