Mexico's 2026 employment subsidy: how employers apply it in payroll and income tax
Mexico's employment subsidy for 2026 equals 15.02% of the monthly UMA and only offsets the worker's income tax. This guide covers the income cap, the calculation, non-monthly pay periods and the payroll CFDI.
For a company with staff in Mexico, the employment subsidy is a small line on each payslip that causes outsized errors. It changes every January, it offsets income tax, and it must be reported correctly in the payroll CFDI. A mistake repeats in every pay period.
At Soulbit Academy we explain Mexico's employment subsidy for 2026 from the employer's side: how much it is worth, who it reaches, how it is credited against payroll ISR and which errors to avoid. It is the neighbor of our guide to IMSS employer contributions in Mexico, which covers the other half of the payroll tax and social security load.
Mexico's employment subsidy for 2026: what it is and how much it is worth
The 2026 employment subsidy reduces income tax (ISR) for anyone earning up to 11,492.66 pesos a month and equals 15.02% of the monthly UMA: 535.65 pesos from February to December. The decree amending it was signed on 30 December 2025, published in the Diario Oficial de la Federación on 31 December and took effect on 1 January 2026.
The decree does not create the subsidy from scratch. It amends article two of the 1 May 2024 decree, which replaced the old table with a fixed amount tied to the UMA, Mexico's unit of account. For 2026 it raises the percentage from 13.8% to 15.02% and updates the income cap. The scheme has three figures.
The first is the percentage: 15.02% of the monthly UMA from February to December. The second is the transitional January 2026 percentage, 15.59%. The third is the monthly income cap, set at 11,492.66 pesos.
The monthly UMA for 2026 is 3,566.22 pesos from 1 February, according to the INEGI press release. The daily value is 117.31 pesos, multiplied by 30.4 to get the monthly figure. With those inputs the monthly subsidy is 535.65 pesos from February to December.
January works differently because the 2026 UMA was not yet in force. That month used 15.59% of the UMA then in effect, which gives a figure close to 536 pesos. Do not compare January payrolls with February's without that caveat.
Can the 2026 figure be used to plan for 2027?
No. The 2027 subsidy depends on the UMA INEGI publishes and on the decree the federal government issues in the DOF at year end. As of November 2026 that figure does not exist. Plan 2027 on the assumption that the amount and the cap will change, and book time in January to reconfigure payroll software.
Who receives the subsidy: the 11,492.66 peso monthly cap
The employment subsidy goes to workers whose wage income does not exceed 11,492.66 pesos a month; anyone above the cap receives none. The decree excludes seniority premiums, retirement premiums, severance and other separation payments from that test.
The cap is compared with the income that forms the ISR base for the month, not with the contractual salary. A worker paid below the cap can therefore fall outside it in a given month if taxable commissions, bonuses or overtime push the base up. That month's payslip carries no subsidy, even if the previous month's did.
This matters at year end. An aguinaldo with a taxable portion raises the December base. The same applies to profit sharing, covered in our guide to PTU in Mexico. Test the cap month by month and do not treat it as a fixed attribute of the employee.
How employers apply the subsidy against payroll ISR
The employer applies the subsidy by subtracting it from the ISR the worker owes for the month, under article 96 of the Income Tax Law. The decree speaks of tax owed by the worker; in practice that subtraction shows up in the withholding the company deducts from the payslip.
The calculation has four steps. The first is to determine the period's taxable income and check that it is under the cap. The second is to compute ISR using the article 96 tariff. The third is to compute the maximum subsidy, which is 15.02% of the monthly UMA or its proportion. The fourth is to subtract the subsidy from the ISR: the result is the amount withheld.
With a single employer the calculation is direct. With several employers, only one should apply the subsidy, because it is not duplicated. Ask at onboarding and keep a record. Check also the 40-hour workweek in Mexico if your pay periods change.
Table 1 shows three hypothetical cases. The ISR amounts are assumptions to illustrate the mechanism and do not come from the official tariff; the subsidy is the February to December 2026 figure.
| Assumed ISR before the subsidy | Maximum subsidy (535.65 pesos) | Amount withheld from the worker |
|---|---|---|
| 300 pesos | 300 of the 535.65 is applied | 0 pesos; the excess of 235.65 is not paid out |
| 535.65 pesos | The full 535.65 is applied | 0 pesos; no excess |
| 700 pesos | The full 535.65 is applied | 164.35 pesos |
The key point is that the subsidy generates no extra payment. It reduces the worker's ISR due, down to a minimum of zero. Employers should document the subsidy calculated and applied each period, and show the accrued subsidy in the payroll CFDI. Keep those records for the annual calculation under the decree.
What happens if the subsidy exceeds the ISR: it is no longer paid in cash
If the subsidy exceeds the worker's ISR, the excess is neither paid in cash nor carried forward: the worker pays 0 pesos of ISR and the surplus is lost. Before May 2024 the earlier scheme allowed the difference to be paid to the worker as extra income.
The rule appears in Article Two of the 2024 decree: if a worker's ISR is lower than the monthly subsidy, the difference cannot offset ISR due later and no amount is paid out. The 2026 decree amends the first, third, fourth and fifth paragraphs of that article, leaving its second paragraph on the excess in force.
There are two practical consequences. First, the subsidy cannot increase a low-ISR worker's net pay beyond eliminating that worker's ISR withholding. Second, the monthly difference cannot be carried to a later month or paid in cash. Article Three of the decree separately governs how the subsidy determined during the year enters the annual ISR calculation, which should be reviewed on its own facts.
What if I paid the subsidy in cash by mistake?
If a difference was paid in cash even though the decree does not allow it, review the calculation, payslip and CFDI with tax and labor advisers. The way to correct a payment to the worker depends on the facts; it is not automatically resolved by deducting the amount from the next payroll.
Non-monthly pay periods: weekly, biweekly and multi-month payments
The 2026 decree sets the formula for periods shorter than a month: the maximum subsidy is the monthly amount divided by 30.4 and multiplied by the days in the period, never exceeding the monthly amount. For a single payment covering two or more months, the monthly amount is multiplied by the number of months covered.
The division by 30.4 is the same one INEGI uses to derive the monthly UMA from the daily value. With 535.65 pesos, the daily subsidy is about 17.62 pesos. Seven days gives about 123.34 pesos, ten days about 176.20 pesos and fifteen days about 264.30 pesos. These are our own rounded calculations using the decree's formula; your payroll software may round differently.
The decree fixes the subsidy amount per period, but the income-cap test must also follow the criterion the rule sets for that period. Do not assume the 11,492.66 peso monthly cap is compared as is against a single week. Check the procedure in the decree or with your tax adviser before configuring non-monthly periods.
| Pay period | How the maximum subsidy is obtained | Result at 535.65 pesos a month |
|---|---|---|
| Monthly | The full monthly amount | 535.65 pesos |
| Biweekly (15 days) | 535.65 divided by 30.4, times 15 days | About 264.30 pesos |
| Ten-day (10 days) | 535.65 divided by 30.4, times 10 days | About 176.20 pesos |
| Weekly (7 days) | 535.65 divided by 30.4, times 7 days | About 123.34 pesos |
| Single two-month payment | The monthly amount times 2 months | 1,071.30 pesos |
How the subsidy appears in the payroll CFDI, and common errors
The subsidy appears in the payroll CFDI through payroll complement version 1.2, in the OtrosPagos node. The SAT's FAQ for the 2024 decree says to record TipoOtroPago code “002”, the decree's subsidy concept, “0” in the Importe field, and the amount calculated under Article Two in SubsidioAlEmpleo:SubsidioCausado. Although the historical label of code 002 refers to an amount “actually delivered” to the worker, the SAT's instruction for this decree sets Importe to zero.
Do not replace that zero with a symbolic cent: the SAT's specific instruction for the subsidy under the 2024 decree says Importe is “0”. The benefit amount goes in SubsidioCausado, a separate field. Before stamping, check that your system uses the SAT's current catalog and validation rules, and reconcile the ISR calculated, the subsidy accrued and the final withholding.
Remote staff add a complication. If your company hires someone outside Mexico or from another state, CFDI criteria differ; see our article on remote-worker payroll and CFDI in Mexico. There are five frequent errors with the subsidy.
The first is applying the subsidy to someone above the month's cap because bonuses or overtime were not recalculated. The second is using January's percentage for the whole year, or 2025's in 2026. The third is not converting the subsidy to the weekly or biweekly period. The fourth is paying the excess in cash, as under the old scheme. The fifth is reporting the accrued subsidy with the wrong amount in the CFDI, which causes rejections when stamping.
What Soulbit's V1 delivers and what it does not
Soulbit Salaries is the module designed to disburse payroll, not a system for calculating ISR or the employment subsidy. The V1 includes balances in USDC and USDT, recurring and batch payroll, institutional custody with MPC, KYB and AML/KYT monitoring.
What Soulbit does not do matters here. It does not calculate any worker's ISR, apply the subsidy, issue or stamp the payroll CFDI or file returns with the SAT. It does not replace the accountant or the payroll software. Also, the V1 local bank rail exists only in Colombia: there is no local peso disbursement in Mexico.
A company that has already computed payroll with the subsidy can, for stablecoin payments to workers who accept them, include that net amount in a batch disbursement. Labor, tax and social security obligations remain with the company and its adviser.
Frequently asked questions
How much is the employment subsidy in Mexico in 2026?
The monthly employment subsidy for 2026 is 15.02% of the monthly UMA, which equals 535.65 pesos from February. January 2026 used 15.59% under a transitional provision of the decree. It applies to workers with income of up to 11,492.66 pesos a month.
Is the employment subsidy paid in cash to the employee?
No. Article Two of the 2024 decree, which remains in force on this point, says that any subsidy exceeding the month's ISR is neither paid to the worker nor applied against tax owed later.
How is the subsidy calculated for weekly or biweekly payroll in Mexico?
For periods shorter than a month, the decree divides the monthly amount by 30.4 and multiplies by the days in the period, never exceeding the monthly maximum. With 535.65 pesos, 7 days gives about 123.34 pesos and 15 days about 264.30 pesos. These are our own calculations using the decree's formula.
What happens if an employer applies the subsidy to someone who does not qualify?
If a worker's income exceeds the monthly cap, the decree does not allow the subsidy. Review the calculation and issued CFDI; consult the SAT or a tax adviser to determine the appropriate correction.
Does Soulbit calculate the employment subsidy or payroll ISR?
No. Soulbit is a payment and treasury rail: it does not calculate ISR, apply the subsidy or stamp the payroll CFDI. Its role starts once the company has computed the net pay to disburse, and the V1 local bank rail exists only in Colombia.
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