Labour alert - Update to Tax Laws 2024: new rules for employment subsidies and pension reform

2024 employment subsidy decree

The employment subsidy decree came into force on May 1, to update the amounts of this stimulus, which had fallen below the minimum wage after the recent increase in the minimum wage.

Workers who have a maximum monthly income equivalent to $9,081.00 will benefit from an employment subsidy of $ 390.13[1], which may be credited against tax payable. In other words, if someone earns more than $9,081.00 per month, they will not get the subsidy.

If workers who earn less than $9,081.00 receive the subsidy against the previously calculated tax, and the subsidy exceeds the previously calculated tax, they will not receive the remainder of this subsidy as income, since the purpose of the subsidy is only to be credited, not to be considered at a later date.

However, some controversial aspects and doubts remain:

• Does the recent May 1 decree repeal the Transitional Tenth decree of 2013?
• Are both subsidies in place?
• Is there a choice between one of the two subsidies?
• If the new subsidy is also insufficient to cover the tax to be paid by employees who earn minimum wage, am I required to make the withholding?
• Are there any considerations or particularities in the case of the border-region minimum wag?

2024 Pension Law Reform

This reform affects only former workers over the age of 70 who have not received a pension, either due to redundancy or old age. The reform will have the funds from their individual Afore and Infonavit sub-accounts moved to the administration of the new Welfare Pension Fund. This means that former employees will now need to request their funds directly from the new administrator.

It is important to mention that the money is not lost, but moved to a federal reserve. Former workers may request their funds at any time without prescription. Workers who are 70 years of age or older who continue to work will not have their funds transferred.

As for any funds that are not requested, they will be used to pay, as a complement, the current pensions to obtain 100% of their last salary, as long as it does not exceed the monthly amount of $16,777 pesos. For current pensioners to achieve this increase in their pensions, they must be registered in the contribution regime as of July 1, 1997, meaning that they must have registered with the IMSS from that date onwards.

Persons enjoying a pension in accordance with the 1973 law, will continue to be paid the pension without any change; the reform has no effect on them.

At Forvis Mazars, our team of professionals is at your disposal for any question on these or any other issues related to your labour and tax compliance.

[1]     The subsidy will be determined in accordance with 11.82% of the current Unit of Measurement and Update (UMA): UMA x 30.4 x 11.82%.