Mexico, one of Latin America’s largest economies, is known for its rich cultural heritage and diverse workforce. To effectively employ and manage staff in Mexico, understanding the country’s payroll and tax systems is essential. This guide covers everything you need to know about payroll in Mexico, from employer and employee contributions to legal frameworks and payroll fraud prevention.
Updated on July 26th, 2024
General Information
- Currency: Mexican Peso (MXN)
- Payroll Frequency: Bi-Monthly / Monthly
- Capital: Mexico City
- Date Format: dd/mm/yyyy
- Fiscal Year: 1 January – 31 December
Employer Contributions
Employers in Mexico are responsible for several payroll-related contributions, including:
- Social Security Contributions (IMSS): Ranges from 24.95% to 33.58% of the employee’s base salary.
- Retirement: 5.15% of the employee’s salary.
- National Housing Fund (INFONAVIT): 6% of the employee’s salary.
- State Payroll Tax: Ranges from 1% to 3%, depending on the state.
- Bi-Monthly Payroll Frequency: Payments are typically made bi-monthly on the 15th and last day of the month.
Employee Contributions
Employees also contribute to their social security and retirement funds, with rates as follows:
- Social Security Contributions: 1.65% of the employee’s salary.
- Retirement / Old Age Insurance: 1.125% of the employee’s salary.
Employee Income Tax Rates
Mexico follows a progressive tax system where the tax rate increases with income. The tax rates for 2024 are:
- Up to 8,952 MXN: 1.92%
- 8,953 – 75,984 MXN: 6.40%
- 75,985 – 133,536 MXN: 10.88%
- 133,537 – 155,229 MXN: 16%
- 155,230 – 185,852 MXN: 17.92%
- 185,853 – 374,837 MXN: 21.36%
- 374,838 – 590,795 MXN: 23.52%
- 590,796 – 1,127,926 MXN: 30%
- 1,127,927 – 1,503,902 MXN: 32%
- 1,503,903 – 4,511,707 MXN: 34%
- Over 4,511,707 MXN: 35%
Profit Sharing
Employees in Mexico are entitled to an annual profit-sharing payment, known as PTU (Participación de los Trabajadores en las Utilidades), which is typically 10% of the company’s pre-tax profits.
Minimum Wage
The general minimum wage in Mexico is 207.44 MXN per day, while the minimum wage in the Free Zone of the Northern Border is 312.41 MXN per day.
Payroll Cycle
Most companies in Mexico follow a bi-weekly payroll cycle, although some industries, like manufacturing, pay weekly.
Types of Payroll Cycles
- Weekly Payroll Cycle
- Bi-Weekly Payroll Cycle
- Monthly Payroll Cycle
Payroll Structure
A typical payroll structure in Mexico includes:
- Gross Salary: The total amount before deductions.
- Bonuses: Performance, seniority, or achievement bonuses.
- Extra Hours: Payment for overtime work.
- Premiums: Holiday, vacation, and Sunday premiums.
- Commissions: Sales-related earnings.
- Wage Subsidies: Employment subsidies and grocery vouchers.
13th Salary
Known as Aguinaldo, this mandatory bonus is equivalent to 15 days of salary and must be paid before December 20th each year.
Calculation of Aguinaldo
The calculation of the 13th salary is straightforward. It is based on the employee’s daily wage and the number of days they have worked during the year. Here is how it is calculated:
Daily Wage: Determine the employee’s daily wage. This is typically calculated by dividing the monthly salary by 30 (the average number of days in a month).
Example: If an employee’s monthly salary is 15,000 MXN, their daily wage is 15,000 MXN / 30 = 500 MXN.
Aguinaldo Amount: Multiply the daily wage by 15 to find the total amount of the Aguinaldo.
Example: 500 MXN (daily wage) x 15 days = 7,500 MXN.
If an employee has not completed a full year of service, the Aguinaldo is prorated based on the number of days they have worked.
Pro-Rated Aguinaldo: For employees who have not worked the full year, calculate the proportionate Aguinaldo based on the actual number of days worked.
Example: If an employee worked 6 months (180 days) out of the year, their prorated Aguinaldo would be: (500 MXN x 15 days) / 365 days * 180 days = 3,698.63 MXN.
Working Hours and Overtime
The standard workweek in Mexico is 48 hours, usually spread over six days. Overtime is paid at 200% for the first nine hours and 300% thereafter.
Overtime Compensation
First Nine Hours: The first nine hours of overtime in a week are paid at 200% (double) the regular hourly wage.
Example: If an employee’s regular hourly wage is 50 MXN, the first nine overtime hours would be paid at 100 MXN per hour.
Beyond Nine Hours: Any overtime beyond the first nine hours in a week is paid at 300% (triple) the regular hourly wage.
Example: If an employee’s regular hourly wage is 50 MXN, any overtime beyond nine hours would be paid at 150 MXN per hour.
Leave Entitlements
Employees are entitled to various vacation and leave benefits, including:
- Vacation Days: From 6 to 22 days annually, depending on seniority.
- Rest Days: One day of rest for every six days of work.
- Vacation Bonus: 25% of the salary during the vacation period.
- Public Holidays: Eight mandatory paid holidays.
- Maternity Leave: Six weeks before and after birth.
- Paternity Leave: Five days after the child’s birth.
Vacation Pay Calculation
Vacation pay includes the base salary plus a 25% vacation bonus. The number of vacation days increases with the employee’s length of service.
The Mexican Federal Labor Law mandates the following vacation days based on the employee’s years of service:
1 Year of Service: 6 days
2 Years of Service: 8 days
3 Years of Service: 10 days
4 Years of Service: 12 days
5-9 Years of Service: 14 days
10-14 Years of Service: 16 days
15-19 Years of Service: 18 days
20-24 Years of Service: 20 days
25-29 Years of Service: 22 days
Termination and Severance
Termination Without Cause
Employees terminated without cause are entitled to:
- Three months’ salary
- 20 days’ pay for each year of service
- Proportional Amounts of Benefits:
- Aguinaldo (Christmas Bonus): The employee is entitled to the proportional part of the Aguinaldo for the year, calculated from January 1st to the termination date.
- Vacation Pay and Vacation Bonus: The employee should receive payment for any unused vacation days, along with the corresponding vacation bonus.
- Seniority Premium: The seniority premium is calculated as 12 days of salary for each year of service, capped at twice the minimum wage.
Termination With Cause
Termination with cause occurs when an employee is dismissed due to actions that justify immediate termination under Article 47 of the Mexican Federal Labor Law.
When terminated with cause, the employee is not entitled to severance pay but is still entitled to receive:
- Accrued Wages: Payment for any days worked up to the termination date.
- Proportional Aguinaldo: The portion of the Aguinaldo accrued during the year.
- Proportional Vacation Pay and Bonus: Payment for unused vacation days and the corresponding bonus.
Employer Key Registrations
Employers must register with:
- Servicio de Administración Tributaria (SAT): For tax purposes.
- Instituto Mexicano del Seguro Social (IMSS): For social security.
- Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT): For housing fund contributions.
Employee Key Registrations
Employees must be registered with:
- IMSS: For social security benefits.
- INFONAVIT: For housing fund benefits.
- SAT: For tax purposes.
Remote Work Laws
Mexico has specific regulations for remote work, ensuring that remote employees have the same rights and benefits as on-site workers.
Employing remote workers incurs specific costs and obligations for employers that may be reimbursed to employees via payroll. These include:
- Equipment and Tools: Employers must provide the necessary hardware, software, and internet access required for remote work. This may include laptops, monitors, ergonomic chairs, and high-speed internet connections.
- Compensation for Utilities: Employers may be required to compensate remote workers for the increased use of utilities such as electricity and internet at their home offices.
- Office Forniture: Employers must ensure that remote workers’ workspaces meet occupational safety and health standards.
Employers are required to respect remote workers’ privacy and cannot use surveillance systems that invade their personal lives.
Social Security
Social security in Mexico includes various benefits such as healthcare, disability, retirement, and occupational risk insurance.
Social Security Calculation
Social security contributions are calculated based on the employee’s base listed salary (BLS). Employers and employees contribute different percentages to various schemes.
Example of Social Security Contributions
Let’s consider an employee with a monthly salary of MXN 20,000. Here’s how the contributions would be calculated:
- Employer Contributions:
-
-
- Healthcare: 20.4% of MXN 20,000 = MXN 4,080
- Disability and Life Insurance: 1.74% of MXN 20,000 = MXN 348
- Retirement: 2% of MXN 20,000 = MXN 400
- Occupational Risk Insurance: Assume 2% (for moderate risk job) = MXN 400
- Nursery and Social Benefits: 1% of MXN 20,000 = MXN 200
- Housing Fund: 5% of MXN 20,000 = MXN 1,000
- Total Employer Contributions: MXN 6,428
-
- Employee Contributions:
-
-
- Healthcare: 0.625% of MXN 20,000 = MXN 125
- Disability and Life Insurance: 0.625% of MXN 20,000 = MXN 125
- Retirement: 1.125% of MXN 20,000 = MXN 225
- Total Employee Contributions: MXN 475
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INFONAVIT
The National Housing Fund Institute (INFONAVIT) provides housing loans to employees. Employers contribute 5% of the employee’s salary to INFONAVIT.
Benefits and Insurance
Mandatory benefits include health insurance, disability pay, maternity leave, childcare, and pensions. Additional benefits may include private health insurance, flexible hours, and performance bonuses.
Occupational Risks: Social Security Premiums vary by risk category (Class I-V).
Class I: 0.54355%
Class II: 1.13065%
Class III: 2.59840%
Class IV: 4.65325%
Class V: 7.58875%
Disease and Maternity Insurance: Covers medical attention, surgery, medicines, and hospitals.
- Maternity leave: 12 weeks with a 100% salary subsidy.
- Employer Contribution:
- Fixed Fee: 20.40% of UMA
- Surplus Fee: 1.10% (if salary > 3 times UMA)
- Worker Contribution:
- Surplus Fee: 0.4% (if salary > 3 times UMA)
Medical Expenses for Pensioners: For retired workers and their beneficiaries.
- Employer: 1.05% of BLS
- Worker: 0.375% of BLS
Disablement and Life Insurance: In case of work-related accidents leading to disability or death.
- Employer: 1.75% of BLS
- Worker: 0.625% of BLS
Retirement: Advanced Age Severance and Old Age pensions.
- Employer Contribution:
- Old Age: 2% of BLS
- Advanced Age Severance: 3.15% – 11.88% (depending on salary)
- Worker Contribution:
- Advanced Age Severance: 1.125% of BLS
Nursery and Social Benefits: Daycare for workers’ children.
- Employer: 1% of BLS
- Worker: None
INFONAVIT: Employer contributes 5% of BLS for housing.
Legal Framework
Mexican labor law is primarily governed by the Federal Labor Law (LFT), which provides extensive protections for workers.
Mexican Constitution
The Mexican Constitution, specifically Article 123, is the cornerstone of labor rights in Mexico. Established after the Mexican Revolution, the Constitution aims to address the exploitation of workers and improve working conditions. Article 123 sets out fundamental labor rights, including:
- Right to Work: Everyone has the right to a job.
- Equal Pay: Equal pay for equal work, regardless of gender.
- Work Hours: Limits on working hours and provisions for overtime pay.
- Rest Days: Mandatory rest days and holidays.
- Health and Safety: Protection of workers’ health and safety.
- Unionization: Right to organize and join labor unions.
- Social Security: Access to social security benefits, including healthcare, housing, and retirement.
- Minimum Wage: Guarantee of a minimum wage sufficient to meet the basic needs of workers and their families.
Federal Labor Law (LFT)
The Federal Labor Law (LFT) is the primary legislative instrument regulating labor relations in Mexico. Enacted in 1931 and last revised in 2019, the LFT provides detailed regulations on various aspects of employment, including hiring, working conditions, wages, benefits, and termination. Key provisions of the LFT include:
- Employment Contracts
- Work Hours and Overtime
- Minimum Wage
- Vacation and Holidays
- Leave Entitlements
- Profit Sharing
- Termination and Severance
- Health and Safety
- Union Rights
Employment Contracts
The LFT mandates written employment contracts for all workers, specifying terms and conditions of employment, including job description, salary, working hours, and benefits.
Under the LFT, employment contracts are classified into several types based on the duration and nature of the work:
- Indefinite Contracts: The most common type, providing continuous employment until terminated by either party.
- Fixed-Term Contracts: For specific projects or a defined period, these contracts are used when the nature of the work justifies a temporary arrangement.
- Seasonal Contracts: For work that is only available during certain times of the year.
- Initial Training Contracts: For employees undergoing training or probationary periods.
- Trial Period Contracts: Allow employers to assess the suitability of new hires, typically for up to 30 days for general workers and 180 days for managerial positions.
Employees vs. Contractors
Employees receive full legal benefits, while contractors do not. Misclassification can lead to legal penalties.
Pay Structures
Common pay structures include salaries and remunerations, salaries assimilated to wages, professional fees, and mixed payrolls.
Common Wage Agreements
The most common wage agreements are:
- Salaries and Remunerations: Full legal benefits and higher taxes.
- Salaries Assimilated to Wages: Lower taxes, fewer benefits.
- Professional Fees: Higher cash income, no benefits.
- Mixed Payroll: Combination of salary types to optimize tax and benefit outcomes.
Salaries and Remunerations
Definition: This is the most traditional and common pay structure in Mexico, where employees receive a regular salary along with various benefits mandated by law.
Components:
- Base Salary: The primary component of the employee’s pay, typically expressed as a monthly figure.
- Bonuses: Additional payments based on performance, seniority, or achievement of specific goals.
- Overtime Pay: Compensation for hours worked beyond the standard workweek, paid at 200% for the first nine hours and 300% thereafter.
- Premiums: Additional payments for working on Sundays, holidays, or under special conditions.
- Commissions: Payments based on sales or other performance metrics, common in roles such as sales.
- Benefits: Legal benefits include social security (IMSS), housing fund (INFONAVIT), retirement savings (AFORE), and the annual Christmas bonus (Aguinaldo).
Advantages for Employees:
- Job Security: Employees have a formal employment relationship with comprehensive legal protections.
- Benefits: Access to mandatory benefits such as health insurance, retirement savings, and housing loans.
- Regular Income: Stable and predictable salary payments.
Advantages for Employers:
Employee Retention: Comprehensive benefits and job security can help retain talent.
Compliance: Adhering to standard pay structures ensures compliance with Mexican labor laws.
Disadvantages:
- High Taxation: Employees in this pay structure face higher tax rates (20-30%).
- Administrative Burden: Employers must manage extensive benefits and legal compliance.
Example:
Gross Salary: $50,000 MXN
ISR (Income Tax): -$10,709 MXN
IMSS (Social Security): -$1,745 MXN
Net Salary: $37,546 MXN
Salaries Assimilated to Wages
Definition: This structure is often used for remote workers or independent professionals who are not considered direct employees but are still paid through the company’s payroll.
Components:
- Base Salary: Similar to a regular salary but treated differently for tax purposes.
- Income Tax (ISR): Withheld by the employer, but the employee is not subject to VAT.
- Exclusions: Employees under this structure do not receive mandatory benefits such as social security, INFONAVIT, or AFORE.
Advantages for Employees:
- Lower Tax Burden: Only income tax is withheld, potentially leading to a higher net income.
- Flexibility: Often used for remote work, providing more flexible working conditions.
Advantages for Employers:
- Reduced Costs: Employers are not required to provide the full suite of mandatory benefits.
- Administrative Simplicity: Simplified payroll management compared to full employment contracts.
Disadvantages:
- Lack of Benefits: Employees miss out on social security, housing funds, and retirement savings.
- Annual Tax Declarations: Employees must handle their own tax declarations, which can be complex.
Example:
Gross Salary: $50,000 MXN
ISR: -$5,203.50 MXN
Net Salary: $44,796.50 MXN
Professional Fees
Definition: Commonly used for freelancers and contractors, this structure involves payments based on invoices submitted by the worker for services rendered.
Components:
- Service Fees: Payments are made based on agreed rates for services provided.
- ISR and VAT: Workers are responsible for their own tax declarations and payments, including both income tax and VAT.
Advantages for Employees:
- Higher Cash Income: Typically, freelancers can negotiate higher rates since they bear their own tax and social security costs.
- Independence: Greater flexibility and control over work arrangements.
Advantages for Employers:
- No Legal Obligations: Employers are not responsible for providing benefits or managing tax withholdings.
- Flexibility: Easy to hire and terminate contracts based on project needs.
Disadvantages:
- No Job Security: Contractors lack job security and legal protections provided to employees.
- Tax Management: Contractors must manage their own taxes, which can be complex and burdensome.
Example:
Gross Salary: $50,000 MXN
ISR: -$12,500 MXN
Net Salary: $37,500 MXN
Mixed Payrolls
Definition: This structure combines elements of traditional salaries and professional fees, optimizing tax efficiency and providing some benefits to employees.
Components:
- Salaries and Remunerations Portion: A percentage of the salary is paid with full benefits and legal protections.
- Salaries Assimilated to Wages Portion: The remaining salary is paid in a manner that reduces the overall tax burden.
Advantages for Employees:
- Benefits Coverage: Access to mandatory benefits through the Salaries and Remunerations portion.
- Higher Net Income: Reduced tax burden compared to a fully salaried position.
Advantages for Employers:
- Cost Efficiency: Optimizes payroll costs by reducing tax liabilities.
- Employee Satisfaction: Provides a balance of benefits and higher take-home pay.
Disadvantages:
- Complexity: Managing mixed payrolls can be administratively complex.
- Benefit Limitations: Some benefits are calculated based on the lower Salaries and Remunerations portion, potentially reducing their value.
Example:
Gross Salary: $50,000 MXN
Net Salaries and Remunerations Income: $10,000 MXN
Gross Salaries Assimilated to Wages Income: $40,000 MXN
ISR: -$5,000 MXN
Net Salary: $45,000 MXN
Regime of Incorporation into the Tax System (RESICO)
Definition: RESICO is a special tax regime aimed at small businesses and independent workers to simplify tax compliance and reduce tax burdens.
Components:
- Simplified Tax Reporting: Reduced paperwork and simplified tax reporting requirements.
- Lower Tax Rates: Beneficial tax rates for eligible small businesses and independent workers.
- Eligibility Criteria: Specific criteria must be met to qualify for this regime, including revenue thresholds and business type.
Advantages for Employees:
- Tax Savings: Lower tax rates compared to standard income tax rates.
- Simplified Compliance: Easier tax compliance with less administrative burden.
Advantages for Employers:
- Cost Reduction: Lower payroll tax liabilities for eligible employees.
- Attract Small Businesses: Encourages small business growth and compliance.
Disadvantages:
- Eligibility Restrictions: Not all businesses or employees qualify for RESICO.
- Limited Benefits: May not include full social security or other employee benefits.
Example:
Gross Salary: $50,000 MXN
RESICO Tax Rate: -$3,000 MXN
Net Salary: $47,000 MXN
Steps to Set Up Payroll in Mexico
- Register the business with SAT, IMSS, and INFONAVIT.
- Open a local bank account.
- Establish payroll processes and cycles.
- Ensure compliance with all local regulations.
- Calculate taxes and contributions.
- Register new employees with relevant authorities.
Payroll Processing Steps
- Register employees in the payroll system.
- Calculate gross pay.
- Deduct taxes and contributions.
- Review for errors.
- Distribute payslips.
- Maintain payroll records.
Types of Payroll Fraud
Employer payroll fraud is a significant challenge in Mexico, with various tactics employed to exploit the system. Common types include:
- Reporting Lower Wages to IMSS: Falsifying information to the Social Security agency.
- Misclassification: Incorrectly classifying employees to save costs.
- Timesheet Fraud: Falsifying work hours.
- Ghost Payroll: Paying nonexistent employees.
- Third-Party Scams: External frauds like W-2 scams.
- Workers’ Compensation Fraud: Faking injuries.
- Commission Schemes: Manipulating sales or project milestones.
Legal Actions Against Payroll Fraud
Employers can file lawsuits to recover stolen money and seek legal punishment. Employees can sue for back pay if their wages are illegally withheld.
Payroll Options for Companies
- Internal Payroll: Managed by in-house teams.
- Local Payroll Outsourcing: Third-party providers handle payroll.
- Global Payroll Outsourcing: Consolidates payroll for international teams.
Simplifying Payroll with an Employer of Record (EOR)
An EOR handles payroll and compliance, allowing companies to hire and pay employees without setting up local entities.
Employer of Record (EOR) Services by CodersLink
CodersLink offers Employer of Record (EOR) services, providing an optimal solution for companies looking to simplify payroll management while expanding their workforce in Mexico. EOR services combine the benefits of local and global payroll outsourcing, offering a comprehensive solution tailored to the needs of international businesses.
FAQ
What are payroll taxes for employers in Mexico?
Payroll taxes include social security contributions, state payroll taxes, and other mandatory contributions.
How do employers calculate social security contributions?
Contributions are calculated as percentages of the employee’s base salary.
What is the minimum wage in Mexico?
207.44 MXN per day, with higher rates in the Free Zone of the Northern Border with 312.41 MXN per day.
What is the 13th salary?
A mandatory bonus equivalent to 15 days of salary, paid before December 20th.
What is the corporate tax rate in Mexico?
The corporate tax rate is 30%.
What is IVA (VAT)?
Mexico imposes a Value Added Tax (IVA) of 16% on most goods and services. In some border states, the rate is reduced to 11%.
What is the average annual income in Mexico?
The average annual income in Mexico varies significantly by industry and region. As of recent data, it generally ranges from MXN 100,000 to MXN 400,000.
How are salaries paid in Mexico?
Salaries in Mexico are typically paid bi-weekly or monthly. The payment method and schedule depend on the employer’s policies and the employment contract.
What does “gross income” mean in Spanish?
In Spanish, “gross income” is “ingreso bruto.” For example, a gross income of MXN 50,000 is referred to as “ingreso bruto de MXN 50,000.”
How do you get paid on salary in Mexico?
Salaries in Mexico are paid directly into the employee’s bank account. Employees receive a pay slip detailing their earnings, deductions, and net pay.
What are the common pay structures in Mexico?
Common pay structures include:
Salaries and Remunerations (Sueldos y Salarios)
Salaries Assimilated to Wages (Asimilados a Salarios)
Professional Fees (Honorarios)
Mixed Payrolls (Mixto)
How does the “Salaries Assimilated to Wages” schema work?
This schema allows employees to be treated as service providers, reducing some tax burdens while not providing full employee benefits.
What are the mandatory employee benefits in Mexico?
Employees are entitled to benefits such as:
Social security (IMSS)
Housing fund (INFONAVIT)
Retirement fund (AFORE)
Annual Christmas bonus (Aguinaldo)
Paid vacation days
Vacation bonus
Profit sharing (PTU)
Maternity and paternity leave
What is the IMSS and what does it cover?
The Mexican Social Security Institute (IMSS) provides healthcare, disability insurance, retirement benefits, and occupational risk insurance.
How does INFONAVIT work?
INFONAVIT provides housing loans to employees, funded by employer contributions amounting to 5% of the employee’s salary.
What is ISR in the context of Mexican salaries?
ISR (Impuesto Sobre la Renta) is the income tax deducted from employees’ salaries, ranging from 1.92% to 35% depending on the income bracket.
What is IVA and how is it applied?
IVA (Impuesto al Valor Agregado) is the value-added tax in Mexico, generally set at 16%, except in border regions where it may be 8%.
How are social security contributions calculated?}
Social security contributions in Mexico are calculated based on a percentage of the employee’s salary, including healthcare, retirement, and occupational risk insurance.
What is “finiquito” in Mexico?
Finiquito is the final settlement paid to an employee upon termination, including unpaid wages, accrued benefits, and proportional parts of the Christmas bonus and vacation.
How do you calculate finiquito in Mexico?
Finiquito is calculated based on unpaid wages, unused vacation days, vacation bonus, proportional parts of the Christmas bonus, and any severance pay due.
What are the grounds for termination with cause under Article 47?
Grounds for termination with cause include dishonesty, threats or violence, negligent damage to property, repeated absence without justification, and more.
What are the severance pay rules for termination without cause?
Employees are entitled to three months’ salary plus 20 days’ pay for each year of service, among other accrued benefits.
What are the remote work laws in Mexico?
Mexican labor law includes provisions for remote work, requiring employers to provide necessary equipment, respect working hours, and ensure data privacy.
What are the costs for employers regarding teleworking?
Employers must cover costs related to internet, electricity, and any additional equipment required for employees to perform their work remotely.
What benefits are remote workers entitled to?
Remote workers are entitled to the same benefits as on-site workers, including social security, housing fund contributions, and paid leave.
What is payroll fraud?
Payroll fraud involves manipulating payroll systems to gain unauthorized payments, such as through ghost employees or timesheet fraud.
What are common types of payroll fraud?
Common types include misclassification of employees, timesheet fraud, ghost payroll, third-party scams, workers’ compensation fraud, and commission schemes.
How can employers prevent payroll fraud?
Employers can prevent payroll fraud by using automated payroll systems, conducting regular audits, and implementing stringent internal controls.
Can legal action be taken against payroll fraud?
Yes, employers can take legal action against employees committing payroll fraud, including filing lawsuits for recovery of stolen funds and seeking criminal charges.
What are the benefits of using CodersLink’s EOR services?
CodersLink’s EOR services provide compliance assurance, local expertise, simplified payroll management, cost-effective solutions, and scalability for growing businesses.
How does CodersLink simplify payroll management?
CodersLink handles all payroll processing, tax withholdings, benefits administration, and compliance issues, allowing businesses to focus on core activities.
Can CodersLink’s EOR services scale with my business?
Yes, CodersLink’s EOR services are designed to scale with your business, accommodating both small teams and large workforces across multiple locations.
What is included in CodersLink’s EOR services?
Services include employee onboarding, payroll processing, compliance management, employee support, and regular reporting.
Glossary of Spanish Terms
- Sueldos y Salarios: Salaries and Remunerations
- Sueldos Asimilados a Salarios: Salaries Assimilated to Wages
- Honorarios: Professional Fees
- Mixto: Mixed Salaries and Remunerations
- Secretaría de Hacienda y Crédito Público: Ministry of Finance and Public Credit
- Servicio de Administración Tributaria (SAT): Tax Administration Service
- Instituto Mexicano del Seguro Social (IMSS): Mexican Institute of Social Security
- Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT): Workers National Housing Fund Institute
- ISR (Impuesto Sobre la Renta): Income Tax
- IVA (Impuesto al Valor Agregado): Value Added Tax (VAT)
- PTU (Participación de los Trabajadores en las Utilidades): Profit Sharing
- IMSS México: Mexican Social Security Institute
- Afore: Retirement Savings Fund
- Finiquito: Final Settlement
- Liquidación: Severance Pay
Mexican tax authorities and labor agencies:
- Secretaria de Hacienda y Credito Publico – Ministry of Finance and Public Credit
- Servicio de Administración Tributaria – Tax Administration Service
- Instituto Mexicano del Seguro Social – Mexican Institute of Social Security
- Instituto del Fondo Nacional de la Vivienda para los Trabajadores – Workers National Housing Fund Institute
