Payroll and taxes in Mexico

At a glance

Key figures with the official source for each, checked November 2026.

Employer registrations before the first pay run

A Mexican employer needs several registrations in place before it can pay anyone. An EOR already holds them. A company setting up its own entity has to obtain each one.

• SAT. A federal taxpayer number (RFC) and an electronic signature, used to stamp payroll receipts and file withholding.
• IMSS. An employer registration (Registro Patronal) with a risk class for the work risk premium. Under Article 15 of the Ley del Seguro Social, each employee must be enrolled within 5 business days, and salary changes and exits are reported inside the same limit.
• INFONAVIT. The housing fund account, which follows the IMSS registration and uses the same salary base and cap.
• State treasury. A payroll tax (ISN) account in each state where staff work.

The contribution base is the integrated salary (Salario Base de Cotización). Article 27 of the Ley del Seguro Social builds it from the daily cash wage plus bonuses, allowances and other regular payments, with a list of exclusions. The base is capped at 25 UMA. INEGI set the 2026 UMA at MXN 117.31 a day from February 1, 2026, so the cap is MXN 2,932.75 a day.

Pay frequency, currency and the CFDI receipt

Article 88 of the Ley Federal del Trabajo limits the pay period to one week for manual work and 15 days for everyone else. That is why office staff are paid twice a month. Article 101 requires wages in legal tender. Payment by bank transfer is allowed with the worker's consent, and the employer carries the cost of the transfer.

Every payment of salary must be supported by a digital tax receipt. Article 99 of the Ley del Impuesto sobre la Renta obliges the employer to issue it for the date of payment and to confirm that each employee is registered with the SAT. The LFT also requires that the payslip give the worker access to the detail of each earning and deduction.

• The receipt is the evidence that the salary is deductible for the employer.
• It is the record the SAT uses to pre-fill the employee's annual return.
• In a labor dispute, the employer carries the burden of proving what was paid, so missing receipts usually count against it.

Deductions from pay are restricted. Article 110 of the LFT lists the few that are allowed, such as debts owed to the employer, which are limited to one month of salary.

Income tax withholding in 2026

The employer withholds income tax (ISR) each pay period and remits it by the 17th of the following month (LISR Art. 96). The monthly tariff published by the SAT in Anexo 8 of the 2026 Resolución Miscelánea Fiscal is:

Article 93 of the LISR exempts part of several payments: 30 days of the reference unit for the aguinaldo, 15 days each for the vacation premium and profit sharing, and 90 days per year of service for severance. A separate employment subsidy reduces the tax of the lowest earners.

IMSS, retirement and INFONAVIT rates

Social contributions are split by insurance branch. The statutory rates applied in 2026 are:

The old-age rate is the moving part. A 2020 pension reform raises the employer share each January until 2030, when the top band reaches 11.875%. In 2026 the 7.513% rate applies to salaries from 4.01 UMA, which covers almost every professional hire. An employee's own deductions come to roughly 2.4% to 2.8% of contribution salary.

Aguinaldo, vacation premium and profit sharing

Three statutory payments sit on top of regular salary and need to be accrued through the year.

• Aguinaldo. Article 87 of the LFT sets a year-end bonus of at least 15 days of salary, paid before December 20. Staff with less than a year of service receive it pro rata, including leavers.
• Vacation premium. Article 80 adds at least 25% to the salary for vacation days.
• Profit sharing (PTU). Employees share in the employer's taxable profit at the percentage fixed by a national commission. Article 122 requires payment within 60 days after the annual tax return is due. Article 127 excludes directors, administrators and general managers, and caps each employee's share at three months of salary or the average of the last three years, whichever is better for the worker. Article 126 exempts newly created companies in their first year.

PTU follows the legal employer's profit. Under an EOR arrangement, the employer of record's results drive any payment, not the client's. Many employers pay a 30 day aguinaldo to compete for professional talent, so check the offer letter as well as the statute when budgeting.

Filing calendar and year-end

The recurring deadlines are:

• ISR withholding. Remitted to the SAT by the 17th of the following month.
• IMSS. Monthly contributions paid by the 17th of the following month (Ley del Seguro Social Art. 39).
• Retirement, old-age and INFONAVIT. Settled every two months alongside the IMSS payment. In 2026 the due dates fall in January, March, May, July, September and November.
• State payroll tax. Filed with each state, normally monthly. Rates and rules differ by state.
• Work risk premium. Reviewed once a year against the employer's claims record. It can move by no more than one percentage point a year.

At year-end the employer calculates each employee's annual tax (LISR Art. 97) and settles the difference no later than February. The calculation is not done for staff who joined after January 1, left before December 1, earned more than MXN 400,000 in the year, or gave written notice that they will file their own return. Those employees file an annual return themselves.

Overtime rules change during the move to a 40 hour week. From January 1, 2027 employers must also keep an electronic record of each worker's start and finish times.

Frequently asked questions

More on hiring in Mexico

Employer of record and hiring guide for Mexico · Termination and notice · Benefits and leave · Contractors vs employees · Cost calculator · EOR vs PEO vs entity

Sources

• Ley Federal del Trabajo (Cámara de Diputados, last reform DOF 14-05-2026)
• Ley del Seguro Social (Cámara de Diputados)
• Ley del Impuesto sobre la Renta (Cámara de Diputados)
• SAT, Anexo 8 of the Resolución Miscelánea Fiscal 2026 (ISR tariffs)
• INEGI, UMA 2026 press release
• Ley del INFONAVIT (Cámara de Diputados)
• IDC Online, 2026 contribution factors and payment calendar (secondary)

This page is general information, not legal, tax or immigration advice. Rates, thresholds and procedures change, and how they apply depends on the facts. Confirm current figures with a qualified adviser or with Dryft before acting. Checked November 2026.