Managing and keeping a company running requires being up to date with various obligations, including tax obligations. Precisely, the Payroll Tax (ISN) is one of the main ones when you have workers in your charge.
What happens with the ISN is that it is a tax that directly impacts the salary of workers. Due to this, the State requires its calculation and payment to companies. Therefore, it is one of the aspects to contemplate month by month when liquidating the payroll of your collaborators. In this article we are going to tell you what the Payroll Tax is and everything it represents. Fundamentally, what changes apply during 2022?
What is the payroll tax in Mexico?
The payroll tax in Mexico is a charge impose by the State on the transactions corresponding to the payment of wages and benefits to workers. That is, the payroll, where the payment of the remuneration offer to all employees is record.
This rate is also known as Tax on Expenditures for Compensation for Personal Work. It is a state tax destine to each natural, moral or autonomous person that generates income in Mexico and pays perceptions to its collaborators. In other words, it corresponds to all the people (legal or physical) who occupy the role of boss in a company. We must clarify that this tax has a local character, since each one of the 32 Mexican states must determine the percentage to apply for the calculation of the load.
Thus, the rate you have to calculate depends on the federal entity in which your company is located. Currently, this percentage ranges between 2% and 4% in the different regions. Regarding the payroll tax law, we must say that this also depends on each federal entity.
- The Mexico City Tax Code establishes the CDMX 2022 Payroll Tax.
- The Finance Law of the State of Sinaloa sets the ISN conditions throughout the territory. This implies knowing, for example, the conditions that govern the Mazatlán Payroll Tax or the Culiacan Payroll Tax.
- While the Financial Code for the State of Tlaxcala and its Municipalities regulate the Tlaxcala Payroll Tax.
With which, a good part of the work of calculating and complying with the ISN consists of knowing the tax legislation of the State in which your company is located.
Which ISN applies in 2022?
Before knowing the details about the composition of the Payroll Tax (ISN) or how to calculate it, we are going to talk about the changes in force from January 1, 2022. At the beginning of each fiscal year, the new rates that will be apply during the same are announce. This year is characterize precisely by being one of those that establishes more changes in rates and new state taxes. In this sense, there are eight entities that modify the percentage of the Payroll Tax. Let’s find out what it is:
Payroll Tax Aguascalientes
This is one of the states of Mexico that modified its Treasury Law. Specifically, various provisions of said regulations were reform, added and repeal and precisely, one of the changes that were introduce is on the payroll tax rate.
As of January 1, 2022, the ISN rate in Aguascalientes goes from 2.5% to 2%. In this way, it returns to the withholding percentage in force in 2019. In this case, the increase that was registered during the last two years was due to a decree that established the increase in the rate for fiscal years 2020 and 2021. The interesting thing about this reduction is that it places Aguascalientes as the only Federal Entity in Mexico that decreases the ISN percentage.
Campeche payroll tax
This is another one of the states that modified its rate for it. In accordance with article 24 of the Campeche Treasury Law, as of 2022, the rate to be calculated for the ISN is 3%. Let us remember that until 2021 the region imposed a gradual rate of between 2% and 3% depending on the rate. Now it has been changed to a fixed percentage of 3%.
Chihuahua payroll tax
Another of the states that presents changes for the 2022 payroll tax is Chihuahua. What can we say about it? In principle, a temporary increase in the ISN rate is established. This will be applied as follows:
- During the fiscal year of 2022 the rate is 4%, being the highest among the states.
- In the fiscal year of 2023 the rate increases to 3.5%.
On the other hand, with the aim of providing support to small and medium-sized companies, they will be granted a fiscal stimulus in order to reduce the monthly ISN payment.
- Small businesses with between 1 and 10 employees can access a 20% reduction in the amount corresponding to Payroll Tax.
- In the case of companies with a workforce of between 11 and 30 workers, a 10% reduction is granted.
- Finally, the tax incentive for organizations with a team of between 31 and 50 employees is a 5% reduction in the ISN payment
Jalisco payroll tax
If you have a company in the State of Jalisco, it is important that you know the new rates to calculate the ISN. In accordance with the Income Law of the State of Jalisco, for fiscal year 2022 this tax will have a gradual increase. Thus, the percentages to consider are:
- January, February and March 2022: rate of 2,125%.
- April, May and June 2022: rate of 2,250%.
- July, August, September, October, November and December 2022: rate of 2.50%.
Payroll tax Querétaro
In the State of Querétaro, the situation is identical to the previous point, while the ISN rate is increase by 1%. On December 23, 2021, the reform to the State Treasury Law was approve and what stands out is the modification of the percentage of the Tax on Expenditures for Remuneration of Personal Work, which went from 2% to 3%.
Payroll tax San Luis Potosí
Also in December 2021, the modification to article 20 of the Law on
Treasury of the State of San Luis de Potosí. This reform establishes an increase in the payroll tax rate. As of 2022, the ISN percentage is 3%, instead of the 2.5% that was applied until last year.
Zacatecas payroll tax
In the case of Zacatecas, the modification related to the 2022 Payroll Tax also establishes an increase. Since this year, when calculating the ISN, companies in the region have to apply a rate of 3%, instead of the 2.5% that was applied until now.