Mexico has recently increased the national minimum wage by 12% and the Unit of Measurement and Update (UMA) by 4.21%, with the goal of boosting the purchasing power of workers earning the minimum wage. The change took effect on 1 January 2025.
Key details
Increase in national minimum wage
The National Minimum Wage Commission unanimously approved a 12% overall increase in the national minimum wage. This increase includes:
An adjustment to the Independent Recovery Amount (“IRA”), which refers to an additional wage increase aimed at supporting the recovery of purchasing power of workers who receive minimum wages.
A 6.5% inflation-based increase on the previous minimum wage.
The minimum wage increased as follows beginning 1 January 2025:
From MXN 374.89 to MXN 419.88 per day for workers located in the Free Economic Zone of the Northern Border.
From MXN 248.93 to MXN 278.80 per day for workers located in the rest of the country.
Employers should be aware that the inflation-based percentage increase (such as the 6.5% in the latest adjustment) is typically used as a reference for collective bargaining and wage reviews to adjust employee wages in line with inflation, if required by their collective bargaining agreement (“CBA”).
Increase in UMA
The UMA is an annually updated economic reference point in Mexican pesos, used to determine the payment amounts for obligations under federal and state laws, like fines, taxes, and certain social benefits. It essentially operates as a standardized unit to calculate various legal payments instead of directly referencing the national minimum wage. In respect of employee benefits, the UMA is used in calculating retirement benefits, allowance limits and health insurance limits.
The National Institute of Statistics and Geography recently published the following values for the UMA for 2025:
Daily: MXN 113.14, up from MXN 108.57 in 2024
Monthly: MXN 3,439.46, up from MXN 3,300.53 in 2024
Annual: MXN 41,273.52, up from MXN 39,606.36 in 2024
Employer action: ACT
Employers should assess their current pay structures, policies, and practices to ensure that all employees' wages align with the new national minimum wage requirements starting from the first full pay period on or after 1 January 2025. Additionally, employers should evaluate how the wage increase may impact employee benefits tied to the minimum wage.
Similarly, employers should review employment contracts and CBAs to determine how the increase in UMA may impact benefits, as well as adjust payroll systems for the higher UMA from 1 February 2025.
Companies may need to revise their compensation budgets to account for the higher wage costs, which could impact other areas, such as benefits or bonuses. Employers may also need to raise wages for employees earning close to the new minimum wage, which could help improve wage equity across various levels of the organization.
Although the wage increase may raise costs, it could also boost employee morale, reduce turnover, and enhance productivity as employees feel more fairly compensated. For small businesses operating on tight margins, however, this increase may create additional financial pressure, possibly resulting in fewer hires or adjustments to business operations.
Increase in Minimum Wages by 2025 | National Commission on Minimum Wages (opens a new window)
Additional insights from Lockton Mexico on the growth trend of minimum wage and the labor landscape in Mexico:
