Taxes
Mexico — Tax: Income Tax (ISR)
Mexico's individual income tax (ISR) has 11 progressive brackets from 1.92% to 35%, updated for 2026 by the SHCP to reflect cumulative inflation — resulting in slightly lower monthly withholding for many salaried employees and freelancers even without a nominal salary increase. The 30% rate begins at MXN 510,451 (~$25,000 USD) annually; the top 35% rate applies only above MXN 3,898,140 (~$195,000 USD). Most middle-income earners fall in the 17.92-23.52% range. A subsidio al empleo (employment subsidy) can reduce or eliminate tax for lower-income workers. Non-residents earning Mexican-source income are taxed at rates from 15% to 30%, with the first MXN 125,900 of employment income in a rolling 12-month period exempt.
VerifiedGovernment / official sourceSecretaría de Hacienda y Crédito Público (SHCP) / SATLast reviewed: 2026-07-19
Key facts
- 11 progressive brackets: 1.92% to 35%, updated for 2026 inflation adjustment.
- 30% bracket begins at MXN 510,451/year (~$25,000 USD); top 35% rate applies above MXN 3,898,140/year (~$195,000 USD).
- Employment subsidy (subsidio al empleo) can reduce or eliminate tax for lower earners.
- Non-residents: 15-30% on Mexican-source income, with the first MXN 125,900 in a rolling 12-month period exempt.
Costs
- Top marginal ISR rate (residents): 35% (above MXN 3,898,140/year)
- Non-resident tax exemption threshold (rolling 12 months): MXN 125,900
Common mistakes
- Assuming a flat rate applies — Mexico's ISR is progressive across 11 brackets, from 1.92% up to 35%.