This article provides a comprehensive overview of individual income tax rules and rates as they apply in Mexico in 2025. Readers will find a detailed breakdown of the progressive tax structure, key tax brackets, and important considerations for withholding and surtaxes.
Individual Income Tax Framework in Mexico
Mexico’s individual income tax system is structured progressively, meaning higher levels of income are taxed at higher rates. The assessment is based on taxable income earned by residents and certain non-residents within a calendar year, denominated in Mexican Pesos (MXN).
2025 Individual Income Tax Brackets
Below is a table summarizing the income brackets and applicable tax rates for individuals in Mexico for the year 2025. All figures are presented in Mexican Pesos (MXN). For international context, recent market rates show $1 USD ≈ $17 MXN (for reference: $10,000 MXN ≈ $588 USD).
| Income Range (MXN) | Income Range (USD) | Rate (%) |
|---|---|---|
| $0.01 – $8,952.49 | $0.00 – $527 | 1.92% |
| $8,952.50 – $75,984.55 | $527 – $4,464 | 6.40% |
| $75,984.56 – $133,536.07 | $4,464 – $7,850 | 10.88% |
| $133,536.08 – $155,229.80 | $7,850 – $9,132 | 16% |
| $155,229.81 – $185,852.57 | $9,132 – $10,932 | 17.92% |
| $185,852.58 – $374,837.88 | $10,932 – $22,049 | 21.36% |
| $374,837.89 – $590,795.99 | $22,049 – $34,753 | 23.52% |
| $590,796.00 – $1,127,926.84 | $34,753 – $66,937 | 30% |
| $1,127,926.85 – $1,503,902.46 | $66,937 – $88,464 | 32% |
| $1,503,902.47 – $4,511,707.37 | $88,464 – $265,394 | 34% |
| $4,511,707.38 and above | $265,394 and above | 35% |
Rates apply progressively, meaning only the portion of income falling within each bracket is taxed at that rate, rather than having the entire income taxed at the highest applicable rate.
Surtaxes and Withholdings
For 2025, an additional withholding tax applies to dividends. The official surtax is:
| Surtax Condition | Rate (%) |
|---|---|
| Withholding on dividends from corporate profits generated after 2013 | 10% |
This applies specifically to dividends paid to individuals from corporate profits arising after 2013. It is withheld at source and must be considered in addition to the main personal income tax obligation.
Key Considerations for Mexico’s 2025 Tax Year
- Progressivity: The tax system ensures a lower effective rate for low- and middle-income earners, increasing significantly for higher-income brackets.
- Currency Fluctuations: For non-residents or expatriates, exchange rates may influence effective reporting or remittance if income is earned in foreign currency. All tax liabilities are calculated in MXN.
- No Blanket Flat Rate: There is no single, flat rate; all assessments follow the tiered bracket structure above. Any official change to the scheme would be published by the Mexican government authorities.
- Dividend Withholding: The 10% dividend surtax is relevant for investors and those with equity in Mexican entities. Proper documentation and withholding compliance are essential.
Pro Tips to Navigate Mexico’s Income Tax in 2025
- Review your gross annual income projection early in the year to estimate your effective tax rate and plan cash flow accordingly.
- If you receive dividends from Mexican companies, ensure the correct surtax is withheld at source and reconcile this when preparing your annual tax return.
- Maintain detailed income records in both MXN and any foreign currency equivalents; this is particularly important if your earnings include foreign or investment sources.
- Utilize digital resources and calculators offered by Mexican tax authorities for personal income tax estimation. Visit gob.mx/sat for updates and official guidance.
- Monitor for any regulatory announcements annually, as the bracket thresholds and rates may be adjusted based on inflation and government policy.
Additional References
For official and up-to-date information, consult the main website of the Mexican tax authority: https://www.gob.mx/sat.
Mexico’s progressive income tax structure in 2025 means tax planning hinges on understanding the tiered bracket system, and recognizing additional surtaxes, such as those on dividends. While rates can rise substantially for higher incomes, thorough documentation and regular review of government guidance will help ensure full compliance with Mexican tax law. Stay attentive to annual changes and leverage official online tools to manage your tax obligations efficiently.