Mexico salary calculator 2026

Mexico taxes income from the very first peso. There is no tax-free allowance in the model, and the income tax table has eleven brackets. That sounds heavy, but the lowest brackets carry very small rates, so the effect is a gradual ramp rather than a cliff: a minimum-wage earner pays a little tax, an average earner pays a moderate amount, and the rate keeps climbing slowly all the way up the scale.

ISR: eleven brackets and no zero band

The federal income tax, Impuesto Sobre la Renta or ISR, is applied to annual income in these steps: 1.92% on the first 8,952 pesos, 6.4% up to 75,985, 10.88% up to 133,536, 16% up to 155,230, 17.92% up to 185,853, 21.36% up to 374,838, 23.52% up to 590,796, 30% up to 1,127,927, 32% up to 1,503,902, 34% up to 4,511,707, and 35% above that. The basic exemption in the model is zero. In real life, low earners receive an employment subsidy that is credited against their ISR and can reduce it to nothing; the model does not include this, so it slightly overstates the tax at the bottom of the scale. The flat versus progressive tax guide uses this kind of table to show how marginal and average rates drift apart.

IMSS: a small employee share of a large system

The employee contribution is to the Mexican Social Security Institute, IMSS, which runs public health care, pensions, disability and childcare. The model uses 2.625% of gross for the worker's share. In reality the worker's contribution is assembled from several components with their own rules and a contribution ceiling, so the single rate is a working average. It does not reduce the income tax base: ISR is calculated on the full gross and the IMSS amount is taken off separately. The employee share is small because Mexico places most of the cost of social security on the employer.

What the numbers look like

The minimum-wage row is the one to read with care. The model shows 593 pesos of ISR on 8,364 gross, but in practice the employment subsidy would offset most or all of that, so the real net at the minimum wage is closer to gross than the table says. From the 16,000 peso average upward the numbers are more representative: 13.6% of gross deducted at the average, rising to 21.6% at 50,000 pesos a month. A round 25,000 peso salary sits between them with 3,672 in tax, 656 to IMSS and 20,672 take-home. The statutory year-end bonus, the aguinaldo, is not in the monthly figure.

What the employer pays on top

The employer's share of social security, housing fund and retirement savings comes to 30% of gross in the model, more than ten times the employee's IMSS deduction. An average-wage employee on 16,000 pesos therefore costs 20,800 a month, with 4,800 pesos of that going to IMSS, the INFONAVIT housing fund and the individual retirement account. The real employer rate varies with the risk class of the workplace and with the salary level, which is another reason the country is marked as an estimate.

IVA at 16%

Value added tax, IVA, is 16% nationwide and the model has no reduced rate. Basic foods and medicines are zero-rated rather than taxed at a lower rate, and a lower rate applies in the northern and southern border zones under a special regime the model does not cover. For everything else, a 100 peso price becomes 116 on the receipt. The IVA calculator adds or removes the 16% from any amount.

Working time and public holidays

The legal working week is 48 hours over six 8-hour days, and 48 is also the statutory maximum for a normal day shift. A five-day week is common in office jobs, but the six-day standard is still the law. The model has seven mandatory rest days in 2026, all on weekdays, giving 254 working days. Several are deliberately moved to a Monday to create a long weekend: Constitution Day is observed on 2 February, Benito Juárez's birthday on 16 March and Revolution Day on 16 November. Independence Day on 16 September keeps its fixed date, as do New Year, Labour Day and Christmas. Days that are widely observed but not statutory, such as Holy Thursday, Good Friday and the Day of the Dead, are not counted, so the working days calculator follows the legal minimum rather than local custom.

Where the model is exact and where it is not

The ISR brackets are the statutory annual table and the IVA rate is exact. The estimate label comes from three simplifications: the missing employment subsidy at low incomes, the blended 2.625% employee IMSS rate in place of the component-by-component calculation, and the flat 30% employer rate where the real figure depends on the job. For an average or above-average salary the net figure should be within a few percent of a real payslip. For comparison, see Colombia or the United States.