Calculate Mexican ISR income tax across 11 brackets (1.92%–35%) with employment subsidy, IMSS social security (~6.25%), and MXN/USD conversion. Resident vs non-resident (25%) comparison.
Mexico ISR Income Tax 2026
Mexico's ISR uses 11 progressive brackets. Residents are taxed on worldwide income; non-residents on Mexico-source income only at a flat 25% withholding. The employment subsidy provides relief for lower earners.
ISR Brackets (Annual, MXN)
1.92% — up to MXN 8,952
6.40% — MXN 8,952 to 75,984
10.88% — MXN 75,984 to 133,536
16.00% — MXN 133,536 to 155,232
17.92% — MXN 155,232 to 185,904
21.36% — MXN 185,904 to 374,838
23.52% — MXN 374,838 to 590,796
30.00% — MXN 590,796 to 1,127,926
32.00% — MXN 1,127,926 to 1,503,902
34.00% — MXN 1,503,902 to 4,511,702
35.00% — Above MXN 4,511,702
Frequently Asked Questions
What are Mexico's ISR income tax brackets for 2026?
Mexico's ISR (Impuesto Sobre la Renta) has 11 progressive brackets: 1.92% (up to MXN 8,952/year), 6.4% (up to MXN 75,984), 10.88% (up to MXN 133,536), 16% (up to MXN 155,232), 17.92% (up to MXN 185,904), 21.36% (up to MXN 374,838), 23.52% (up to MXN 590,796), 30% (up to MXN 1,127,926), 32% (up to MXN 1,503,902), 34% (up to MXN 4,511,702), and 35% above MXN 4,511,702. Brackets are adjusted for inflation annually by SAT (Mexico's tax authority).
What is the employment subsidy (subsidio al empleo) in Mexico?
The employment subsidy (subsidio para el empleo) is a refundable credit for lower-income Mexican employees. Employers apply the subsidy table to reduce monthly withholding for employees earning up to approximately MXN 7,382/month. For the lowest earners, the subsidy can completely eliminate income tax liability and even generate a positive credit. The subsidy is built into employer payroll withholding and is adjusted annually.
How much is social security (IMSS) in Mexico?
Mexican employees pay approximately 2-3% of salary to IMSS (social security) directly, but the total employee social security contribution including IMSS, INFONAVIT (housing), and pension fund is approximately 6.25% of salary. The employer pays a much larger share (~25-30%). IMSS is capped at 25 times the minimum wage (approximately MXN 2,640/day in 2026). Self-employed and freelancers can register voluntarily with IMSS at different rates.
How are non-residents taxed in Mexico?
Non-residents receiving Mexican-source income face a flat withholding rate that varies by income type: 25% on wages/salaries (the most common for expats), 30% on royalties, 10-35% on rental income depending on the treaty, and reduced rates under double tax treaties. Mexico has treaties with 60+ countries including the US, Canada, UK, Germany, and Spain. Under the US-Mexico treaty, US residents working in Mexico may benefit from reduced withholding if their stay is under 183 days and other conditions are met.
Can US citizens in Mexico claim foreign tax credits?
Yes. US citizens living in Mexico can generally claim a foreign tax credit (Form 1116) for Mexican ISR paid against their US federal tax liability. The US-Mexico tax treaty also provides specific provisions to avoid double taxation. Some US expats in Mexico use the Foreign Earned Income Exclusion (FEIE) instead of the credit. Since Mexico's top effective rates can exceed US rates, proper planning is important to maximize after-tax income in both jurisdictions.