Mexico Payroll & HR Glossary
Clear definitions of the payroll and human resources terms that companies and workers face in Mexico, from IMSS and ISR to aguinaldo, finiquito and PTU.
IMSS
The Mexican Social Security Institute, which provides social security; its cost is shared between worker and employer.
ISR
The Impuesto Sobre la Renta (income tax) levied on income; in payroll the employer withholds it according to the SAT's table.
Aguinaldo
A mandatory annual benefit equal to at least 15 days of salary, payable before December 20.
Finiquito
The payment of outstanding amounts when the employment relationship ends (salary, plus proportional vacation, vacation premium and aguinaldo).
Prima vacacional
An additional payment of at least 25% on the salary corresponding to the vacation days.
PTU (reparto de utilidades)
The workers' share in the company's profits (Participación de los Trabajadores en las Utilidades), paid once a year.
Infonavit
The institute that administers the national housing fund; the employer contributes 5% of the worker's salary.
Sueldo neto
What the worker receives after subtracting ISR and the employee IMSS contribution from gross salary.
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