Employment Subsidy

On December 31, 2024, the Official Gazette of the Federation published the “DECREE amending the previous decree granting the employment subsidy.”

The employment subsidy is a fiscal benefit designed to support low-income workers by reducing the impact of income tax (ISR) on their finances.

In this context, the decree establishes adjustments to the fiscal mechanism in response to the 12% increase in minimum wages (MW) for 2025, which rises from $248.93 to $278.80 daily for non-border regions. The goal is to ensure that the increase in workers’ disposable income, after applying ISR, aligns proportionally with the MW increase. The following terms apply:

  • A monthly employment subsidy is granted to workers whose monthly income does not exceed $10,171.00, excluding amounts received for seniority premiums, severance, retirement, or other separation payments, up to an amount derived from multiplying the monthly value of the Unit of Measurement and Update (UMA) by 13.8%.

  • For employers paying wages for periods shorter than a month, the employment subsidy for each payment will be calculated by dividing the amount obtained by multiplying the monthly UMA value by 13.8% by 30.4. The result will then be multiplied by the number of days in the payment period to determine the subsidy amount.

  • When wages are paid for periods shorter than a month, the employment subsidy amount must not exceed the maximum monthly amount obtained by multiplying the monthly UMA value by 13.8%.

  • For lump-sum wage payments covering two or more months, the employment subsidy will be calculated by multiplying the monthly UMA value by 13.8% and then by the number of months covered by the payment.

Objective of the Reform

This reform seeks to comply with the principles of proportionality and equity in taxation, as established in Article 31, Section IV of the Mexican Constitution, while aligning with labor regulations. These regulations ensure that workers cannot earn below the prevailing minimum wage, underscoring the necessity of such subsidies.

We recommend that your accounting department review and implement this provision appropriately.

For further clarification or assistance, please do not hesitate to contact us.

Sincerely,

ILC Integral Legal Consulting, S.C.