Japan
Mexico
Exchange rates: European Central Bank reference rates, 2026-10-23. Japan: Tokyo, Kyokai Kenpo, salary paid evenly each month with no bonus, no dependants. Mexico: A single employee in Mexico City, Mexican national and tax resident, no dependants, permanent contract, salary paid evenly as monthly pay with no bonus. Calendar year 2026. Income tax (ISR) is the 2026 tariff in Annex 8 of the 2026 Miscellaneous Tax Resolution (monthly withholding tariff under Art. 96 LISR, annualised; identical to the annual Art. 152 tariff). Social security (IMSS), housing fund (INFONAVIT) and retirement (SAR) are charged on the salario base de cotización (SBC), taken as salary × 1.0493: the statutory minimum integration for 15 days' aguinaldo and a 25% vacation premium on 12 days' first-year leave, even though the aguinaldo and vacation premium themselves are not modelled. UMA MX$113.14 a day in January and MX$117.31 from 1 February 2026; contribution ceiling 25 UMA. Employer: work-risk premium at the class I average (office work), the 2026 employer cesantía y vejez rate for an SBC above 4 UMA, and Mexico City payroll tax at 4%.
At three salary levels
| Salary (US$ equivalent) | Japan | Mexico |
|---|---|---|
| $60,000 | Cost 1.14× Keeps 73% ¥9,408,202 | Cost 1.24× Keeps 74% MX$1,126,915 |
| $120,000 | Cost 1.10× Keeps 66% ¥18,816,403 | Cost 1.14× Keeps 71% MX$2,253,830 |
| $250,000 | Cost 1.05× Keeps 57% ¥39,200,840 | Cost 1.09× Keeps 68% MX$4,695,479 |
Employment rules compared
| Japan | Mexico | |
|---|---|---|
| Statutory annual leave | 10 days after six months, rising to 20; 5 days must be taken | 12 days after year 1, rising to 20 in year 5; 25% vacation premium |
| Public holidays in 2026 | 18 | 7 (Mexico City) |
| Notice of dismissal | 30 days, or pay in lieu | None statutory; written notice of cause on dismissal |
| Severance required by law | None | 3 months + 20 days/year (if no reinstatement) + 12 days/year seniority premium |
| Typical negotiated exit | Commonly 3–6 months’ pay plus unused leave | Typically the constitutional severance (3 months + 20 days/year), negotiated |
| Probation | Commonly 3–6 months; dismissal still needs grounds | 30 days; 180 days for managers and professionals |
| Working hours | 40 a week; overtime capped at 45 a month and 360 a year | 8/day, 48/week; falling to 40 by 2030 |
| How hard is dismissal? | Very hard: needs objectively reasonable grounds | Hard: just cause under LFT art. 47 or pay severance |
| Women in management (ILO) | 14.5% (2023) | 39.3% (2025) |
Questions
What does a US$120,000 salary cost an employer in Japan and Mexico?
With the rates and exchange rates as of October 2026, in Japan (Tokyo, ¥18,816,403) the employer’s total cost is 1.10 times the salary; in Mexico (MX$2,253,830) it is 1.14 times. The employee keeps 66% of salary in Japan and 71% in Mexico.
Is it cheaper to employ someone in Japan or Mexico?
At this salary, the employer’s on-cost is lower in Japan. The ratio changes with pay, though: where contributions are capped, the on-cost falls as a share of salary for high earners. Enter the real salary in the calculator above to compare.
How do notice and severance compare?
Japan: 30 days, or pay in lieu; no severance is required by law, and negotiated exits are commonly 3–6 months’ pay plus unused leave. Mexico: notice is none statutory; written notice of cause on dismissal; severance required by law: 3 months + 20 days/year (if no reinstatement) + 12 days/year seniority premium; typical negotiated exit: typically the constitutional severance (3 months + 20 days/year), negotiated.
Which has more paid leave and public holidays?
Japan: 10 days after six months, rising to 20; 5 days must be taken, and 18 public holidays in 2026. Mexico: 12 days after year 1, rising to 20 in year 5; 25% vacation premium, and 7 public holidays in 2026.
Sources: Japan (Kyokai Kenpo, Japan Pension Service, MHLW, National Tax Agency, MIC). Mexico: every rate and rule is listed with its primary source on Mexico's HR data. Exchange rates: ECB reference rates (2026-10-23); for currencies the ECB does not quote, the central bank's rate.
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