Here at Nomad Capitalist, to help you make wise choices and maximize your investments, we will thoroughly summarize the average salary in Mexico.
Mexico has long been a popular option for American businesses looking to gain a competitive advantage through offshoring.
However, understanding the average salary in Mexico is one of the most important aspects when setting up Mexican companies.
Salary ranges can vary depending on many factors, including industry, years of experience, education, and job description.
How Much Money Does A Person Working In Mexico Make?
We must first examine the minimum wage to comprehend Mexico’s average wage. The Mexican minimum wage is MXN 141.70 per day, or about USD 7.11, as of 2023. (MXN stands for Mexican pesos)
However, the average salary in Mexico is significantly more than the minimum wage.
According to the National Institute of Statistics and Geography (INEGI), the monthly average salary in Mexico is MXN 8,970, or roughly USD 449.
This average salary differs considerably by career field, educational attainment, years of experience, and industry and applies to all employees, from executives to low-skilled workers.
Difference Between The Median and The Average Salary
In Mexico, “average salary” typically refers to the mean, calculated by dividing the total number of salaries by the total number of employees.
Yet, the median, or middle value in a list of incomes, is another crucial indicator of central tendency. The fact that Mexico’s median pay is lower than the global average suggests that a few high earners have skewed the mean.
For instance, the average wage in Mexico in 2022 was MXN 9,320 (about USD 466), compared to the median salary of MXN 7,200 (around USD 360).
Salary Data for Different Professions
Many professions in Mexico offer varying reimbursement rates regarding average salaries.
The most well-paid careers in Mexico are often those in finance, technology, engineering, and management, while the least well-paid jobs are in agriculture, hospitality, and retail.
The average monthly wage for some of the most popular career fields in Mexico in 2021, as reported by INEGI, was:
- Management: MXN 21,100 or around USD 1,054
- Engineering: MXN 17,800 or around USD 889
- Finance: MXN 16,500 or around USD 825
- Technology: MXN 16,000 or around USD 800
Average Annual Salary Increase
The average annual salary in Mexico varies according to the employee’s experience.
Employees with greater experience get less substantial raises than those with less experience.
Generally speaking, an employee with less than one year of experience can anticipate an average yearly wage rise of 11.8%.
In contrast, an employee with ten or more years of experience can expect an average annual salary increase of 3.3%, per data from INEGI.
How to Calculate The Salary Increment Percentage?
A valuable tool for salary negotiations, analyzing raises or promotions, and identifying market trends is the calculation of salary increments.
You can use a straightforward method to determine the pay increment percentage. First, deduct the previous salary from the new wage to determine the salary increase.
To calculate the percentage increase, divide the pay increase by the earlier salary and multiply the result by 100. For instance, if the new wage is MXN35,000 and the prior salary is MXN 30,000, there would be an MXN 5,000 wage rise.
A pay augmentation percentage of 16.67% is obtained by dividing the increase by the previous salary (MXN 30,000) and multiplying the result by 100.
How Does The Education Level Affect Your Salary?
One of the factors directly influencing employee reimbursement in Mexico is education. In general, wages increase with higher levels of education.
For example, in 2020, those with higher education made an average pay of 17,946 Mexico pesos per month, while those with lower education made just 7,371 pesos per month on average, according to the INEGI.
Salary Comparison by Education
Education levels significantly influence the average salary in Mexico.
For instance, employees with a high school diploma make an average monthly salary of 11,603 pesos, while those with a bachelor’s degree make an average of 16,974 pesos.
Additionally, individuals with a master’s degree earn an average monthly salary of 24,051 pesos, while those with a doctorate make an average of 31,878.
Salary Comparison By Gender
Although Mexico has recently taken steps to close the gap, there is still a gender wage discrepancy in Mexico.
In Mexico, women make about 20% less money than males. The wage gap is especially severe in some professions, like engineering and computer technology, where women earn much less than men.
What is the Average Salary in Mexico?
The average pay in Mexico was MXN 16,449.22 per month in 2021, which is about similar to USD 820 per month, according to data from the Mexican Social Security Institute (IMSS).
In terms of an hourly wage, the average income of a Mexican worker in the manufacturing industry is around USD $3.50/hour.
Salary Comparison by Years of Experience
Another element that has a significant impact on the average wage in Mexico is experience. Employees with more years of experience typically make more money.
For instance, an employee with less than a year of experience earns an average monthly compensation of 7,196 pesos.
In contrast, an employee with ten or more years of experience makes an average monthly salary of 23,987 pesos, according to the National Institute of Statistics and Geography (INEGI).
Daily Minimum Wage (Minimum Salary Bill)
The government determines the minimum wage in Mexico, which is raised yearly. The Mexican minimum wage is 141.70 pesos per day as of 2022, or about $7 per day in dollars.
However, it is crucial to remember that many Mexican workers make more than the legal minimum wage, and several sectors, including manufacturing and technology, offer much higher incomes.
Average Salary Increase Rate by Experience Level
The average annual salary increase in Mexico varies according to the employee’s experience.
In general, employees with greater experience get pay raises that are less substantial than those with less experience.
For example, an employee with less than one year of experience can anticipate an average yearly wage rise of 11.8%.
Average Monthly Salary For Experience Workers
In contrast, an employee with ten or more years of experience can expect an annual average wage increase of 3.3%, per statistics from the National Institute of Statistics and Geography (INEGI).
Low Wages and Operational Cost
Mexico’s low labor expenses are a significant draw for U.S. businesses. The average wage in Mexico is lower than in the U.S. because of Mexico’s much lower cost of living (one reason why so many people are moving from California to Mexico).
A sizable number of the nation’s skilled workforce, however, is multilingual and speaks English, as well as Spanish and other languages. As a result, Mexico has low wages but high levels of productivity.
To reduce their labor costs, many US businesses now outsource manufacturing work to Mexico, which has developed into a hub for manufacturing.
Manufacturing jobs, including IT, customer service, and accounting, are transferred to Mexico.
Ford, General Electric, and Honeywell are just a few businesses that have relocated portions of their operations to Mexico to take advantage of the low labor costs.
Similar Time Zones to North America
Because Mexico is in the Central Time Zone, it is the perfect location for businesses with U.S.-based operations.
This makes collaboration easier and also means easier communication for calls, online meetings, etc.
What Is A Middle-Class Income in Mexico?
On average, families in Mexico’s middle class earn between 10,000 and 25,000 pesos a month.
Based on the current exchange rate, this range translates to USD 500 to USD 1,250 monthly.
What Jobs Are Being Outsourced To Mexico
Although much employment is being outsourced to Mexico, manufacturing positions in the automotive, aerospace, and electronics sectors are the most frequent. IT, customer support, and accounting are other professions outsourced to Mexico.
Mexico in most cases, is a nation that presents several chances for American businesspeople and investors. It is the perfect site for outsourcing tasks and operations in Mexico because of its affordable labor prices, highly educated workforce, and similar time zones to North America.
Using the data from the National Institute of Statistics and Geography (INEGI) and other reliable sources, we have provided a basic sense of what to anticipate regarding average earnings in Mexico.
While these figures serve as general guidelines, it is crucial to conduct compensation research according to the profession and job title you plan to pursue.
Are you looking to expand operations overseas and need help determining what country suits you best? At Nomad Capitalist, we can advise you on offshore banking, company formation, staffing, and taxes and tie them together as part of your Action Plan.
Finally, we can assist you in navigating the Mexican legal and financial system, whether you want to start businesses in Mexico, make real estate investments, or outsource work there.