Mexico Payroll: Key Compliance Requirements

Mexico’s payroll process is one of the most procedural globally, driven by mandatory digital payroll reporting and strict statutory obligations. Employers must ensure that every payroll payment is issued as a CFDI payroll receipt (Comprobante Fiscal Digital por Internet – CFDI de Nómina) and validated by the SAT (Servicio de Administración Tributaria). These electronic records serve as the official tax documents recognised by the Mexican tax authority.

Each payroll payment — including salaries, bonuses, and statutory benefits — must comply with the SAT’s prescribed XML structure. Payments issued without a valid CFDI are not considered compliant for tax purposes, even if wages have been paid.

What Employers Must Manage

• CFDI Payroll Reporting
  All payroll payments must be issued through CFDI payroll receipts in accordance with CFDI 4.0 and the Nómina Complement 1.2 requirements. These digital receipts form the legal basis for payroll tax reporting and compliance.
• Income Tax and Social Security Withholdings
  Employers are responsible for withholding and remitting income tax (ISR – Impuesto Sobre la Renta) and statutory social security contributions to IMSS (Instituto Mexicano del Seguro Social), including related obligations such as INFONAVIT.
• PTU (Profit-Sharing) Obligations
  Employers must calculate PTU (Participación de los Trabajadores en las Utilidades) based on annual profits, in line with Mexican labour law. While PTU is paid later in the year, the obligation must be properly tracked and accounted for.
• Aguinaldo (Statutory Bonus)
  Employees are entitled to an aguinaldo equivalent to at least 15 days’ wages, payable in accordance with the Federal Labour Law. This payment must be processed through payroll and reported via CFDI payroll receipts.
• Payroll Data Accuracy and Validation
  Employers must ensure payroll data is correctly classified, accurately timestamped, and fully aligned with the SAT’s validation rules to avoid rejected filings, adjustments, or penalties.

Optional but Common Practice

Although not legally required, many employers provide an annual employee tax summary (Constancia de Percepciones y Retenciones). This document mirrors the payroll information already reported to the SAT through CFDI records and is often issued to employees for reference and personal tax filing purposes.

Why Mexico Payroll Is Considered High-Risk

Mexico payroll carries a higher compliance risk because salary payments are legally required to be reported through CFDI payroll receipts, which serve as the official tax record recognised by the SAT. Unlike jurisdictions that rely primarily on annual reconciliations, payroll inaccuracies in Mexico — such as incorrect tax withholding, benefit classification, or CFDI formatting — are reflected directly in the electronic records submitted to the tax authority. Combined with mandatory labour law benefits such as aguinaldo and PTU, payroll compliance requires close coordination between tax, payroll, and labour law obligations.

How Link Compliance Can Support

Link Compliance helps organisations navigate local regulatory requirements when operating in Mexico, with a focus on tax, employment, and compliance obligations. Our team supports businesses in aligning internal processes with local rules and reporting standards while monitoring regulatory changes. This enables organisations to operate with greater clarity and reduced compliance risk in the Mexican market.

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Disclaimer:

This content is provided for general informational purposes only and does not constitute legal, tax, or professional advice. Regulatory requirements may change and their application may vary based on specific circumstances. Organisations should seek appropriate professional or legal advice before taking action based on this information.

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Stay compliant and prepared for 2026 with Link Compliance.
Email: info@linkcompliance.com

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