Understanding ISR Tax Deductions on Annual Aguinaldo Bonuses in Mexico
Learn how the Mexican tax authority calculates aguinaldo taxes and potential recovery methods.
1Mandatory Annual Bonus Structure
In Mexico, the aguinaldo is a mandatory year-end benefit regulated by Article 87 of the Federal Labor Law. Employers must pay workers at least 15 days of salary before December 20. While this payment is a guaranteed right, it remains subject to the Income Tax, known locally as ISR.
2Exemption Thresholds for 2026
Taxation on the aguinaldo is not applied to the entire amount. According to the Income Tax Law, bonuses are exempt up to 30 times the daily UMA value. With the 2026 UMA set at 117.31 pesos, the tax-free threshold is exactly 3,519.30 pesos, regardless of the total bonus size received.
3Calculating Taxable Income Portions
If an employee earns 15,000 pesos monthly, a 15-day aguinaldo totals 7,500 pesos. After subtracting the 3,519.30 pesos exemption, the remaining 3,980.70 pesos are considered taxable income. Employers apply specific withholding procedures to this surplus, which can result in deductions ranging from 400 to 640 pesos for this specific salary bracket.
4Withholding vs Final Liability
The tax amount deducted from the aguinaldo is considered a provisional payment rather than a final tax burden. These withholdings are aggregated with other payroll taxes throughout the fiscal year. Consequently, the figure appearing on a pay stub does not necessarily represent the total annual tax liability for the individual worker.
5Recovering Taxes via Declaration
Workers may recover portions of their withheld taxes by filing an annual tax declaration in April 2027. If the total annual withholdings exceed the final calculated tax liability, the SAT grants a favorable balance. This refund depends heavily on the taxpayer successfully applying all eligible personal deductions during the filing process.
6Role of Personal Deductions
A favorable balance is not guaranteed simply by paying taxes on the aguinaldo. It requires the taxpayer to meet specific criteria and utilize legal deductions. Once a balance is confirmed, the taxpayer can choose to receive a direct refund from the SAT or apply the amount toward future tax payments.
7Verifying Payroll Documentation
Employees should review their digital payroll receipts to identify the breakdown of exempt versus taxable income. These documents clearly list the aguinaldo amount, the applied exemption, and the specific deductions made by the employer. Transparency in these records allows workers to verify that their bonus was processed according to legal standards.
8Seeking Professional Tax Guidance
If discrepancies arise regarding payroll calculations, workers are encouraged to consult their employer or payroll department first. For further clarification, individuals can seek guidance from professional accountants or the Prodecon, a government agency dedicated to defending taxpayers' rights. These resources ensure that workers understand their fiscal obligations and potential benefits.
Original article: Expansión — Understanding ISR Tax Deductions on Annual Aguinaldo Bonuses in Mexico