Mexico Update: Integration of the Basic Salary of Contribution to the IMSS

On July 07 published in the Official Gazette of the Federation, was the Agreement “ACDO. AS2. HCT.260623/160.P.DIR” issued by the Technical Council of the Mexican Social Security Institute, in order to guide employers regarding the exclusions as members of the base contribution salary of payments that exceed the maximum amount of the participation of workers in the profits of companies, and payments made by way of productivity bonus or of any other nature in accordance with the Article 27 of the Social Security Act.

The most important points to consider in the Agreement are the following:

• In relation to the participation of workers in the profits of companies, if the amount covered to workers exceeds the maximum limit determined in the last reform on outsourcing of three months of salary or the average of what they would have received in the last three years, and the employer decides not to deduct the amount exceeded, this amount will no longer be considered as OCT, but becomes a bonus and must be included in the basic contribution salary.

• Likewise, with respect to the participation of workers in the profits of companies, the Agreement indicates that there are practices of employers that cover amounts in money to workers and that are recorded in the accounts as payment of OCTs and that these are payments in advance or advance installments of OCTs, however, when the payment of these partial payments is made outside the deadlines indicated for the payment of the OCT (sixty days following the date on which the annual Income Tax must be paid) such payments lose their nature of OCT and must be integrated into the basic salary of contribution to the IMSS.

• In relation to productivity bonuses, also called incentives, commissions, bonuses or gratuities, the Agreement states that such benefits are directly related to the performance at work and the provision of the service of workers, regardless of the form in which they are paid, so, even when such bonuses are delivered to workers through food vouchers or gift cards, They must be included in the basic contribution salary, regardless of the form in which they are covered.

• Finally, the Agreement establishes that the following actions will be considered an improper tax practice in the field of social security:

• Exclude from the basic contribution salary payments that exceed the maximum amount of workers’ participation in the profits of companies.

• Pay the participation of workers in the profits of companies outside the period established in article 122 of the LFT, either before or after the indicated period.

• Exclude from the base salary of contribution the payments made by concept of bonus of productivity or of any other nature.

• Issue a “clean and unqualified” compliance opinion by an authorized public accountant in the opinion on social security matters of employers who incur in any of the aforementioned behaviors.

By Jáuregui y Del Valle, S.C., Mexico, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact mexico@transatlanticlaw.com

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