On May 1, 2024, the Decree granting the employment subsidy (the “Decree”) was published in the Official Gazette of the Federation, which is aimed to taxpayers who receive any income for the rendering of a subordinated personal service, as well as to officers and workers of the Federation, Federal Entities and Municipalities, even when they are for expenses not subject to verification, as well as to members of the armed forces.

The subsidy is granted to the workers described in the preceding paragraph whose monthly income does not exceed MXP $9,081.00 (Nine Thousand Eighty-One Pesos, 00/100 Mexican Pesos), not including those received for seniority premiums, retirement bonuses and severance payments or any other separation payments and is granted up to an amount resulting from multiplying the monthly Units of Measurement and Updating (UMA) by 11.82%.

Only in the event that the monthly employment subsidy, calculated in accordance with the preceding paragraph, is less than the tax payable by the employee, the difference cannot be applied against the tax payable by the employee at a later date, nor will any amount be paid as employment subsidy in favor of the employee.

In the case that employers apply the employment subsidy, they must calculate the annual tax by subtracting the payroll tax (or the equivalent in their state) retained from the accumulated income and apply the rate stablished in the article 152 of the Income Tax Law, resulting in the tax payable. The amounts corresponding to each employee as a monthly employment subsidy will be subtracted from the tax payable.

In case of any doubt or comment, our tax team can assist you in the following contacts:

Paul Kavanagh – paul@k-g.com.mx
Luis Kanchi – lkanchi@k-g.com.mx
Miguel Alonso – malonso@k-g.com.mx