The employment subsidy is a fiscal benefit designed to support low-wage employees.

On May 01 of the current year a decree that grants an employment subsidy was published in the Official Gazette of the Federation [in Spanish: el Diario Oficial de la Federación] (DOF).

The progressive increases in the minimum wage have caused the employment subsidy to lose the effectiveness for which it was created, since according to the previous chart, the monthly income limit for receiving a subsidy was $7,382.33, while the average monthly minimum wage surpasses the aforementioned amount.

The decree states that workers whose monthly income serves as a base for calculating Income Tax, [in Spanish: ISR], corresponding to the calendar month, not exceed $9,081.00 M.N., except for what was received with respect to a seniority bonus, pension, and compensations, or other severance payments, and as such, they will benefit from this subsidy which is the equivalent of 11.82% of the monthly value of the Unit of Measure and Update (UMA). The said subsidy will be applied against the Income Tax in the calendar month in accordance with Article 96 of the Law on Income Tax.

For those cases in which the tax charged to the worker is less than the monthly employment subsidy, the difference will not be applied against the tax for which he/she was previously responsible for, nor will any amount be submitted with respect to the employment subsidy.

This measure does not apply to the border area, where the average monthly minimum wage is the equivalent of $11,396.66, exceeding the cap of $9,081.00, as indicated in the decree. This amendment will provide support to those workers who have 1.20 of the earnings of minimum wage or less, that is, monthly income of up to $9,081.00.

Thank you for your attention, and a reminder that as always our personnel in JA del Río are always at your disposal to assist you in matters concerning compliance in your company, and to offer you alternatives and solutions to address these regulations. 

Please contact us by e-mail at: contacto@jadelrio.com if you would like more information about our services.