From gross to net salary in Mexico

Two deductions come off the salary in a Mexican contract: income tax and the worker's social security contribution. And one credit, the employment subsidy, which on low salaries can add rather than subtract.

Enter the monthly gross and you will see all three separately.

Income tax comes from the monthly table in article 96: find the salary's bracket, take its fixed amount and add the rate applied to whatever exceeds the lower limit.

If the salary is under the threshold, the employment subsidy is deducted from the tax. The IMSS contribution is worked out on the contribution base salary, the salary times the integration factor.

The employment subsidy is what surprises people most in the breakdown: if your salary is under $11,492.66 a month, the government puts in $536.22 which comes off the tax. And if your tax is smaller than that, the difference <b>is paid to you</b>: the withholding goes negative and the net is higher than gross less social security.

The worker's IMSS contribution is four fixed items adding up to 2.375% of the contribution base, plus 0.40% that only applies above three UMA. That is why low salaries never see that 0.40%.

The integration factor turns the salary into the contribution base, because social security also charges on the Christmas bonus and holiday premium spread over the year. The 1.0452 is the legal minimum with 15 days of bonus and 12 of holiday; more generous benefits mean a higher factor and a higher contribution.