February 2023 has arrived and with it the beginning of the new value of the Unidad de Medida y Actualización (UMA), which will be in effect from February 1, 2023 to January 31, 2024.
Let us recall some of the payroll implications of this unit.
Pursuant to the provisions of the Political Constitution of the United Mexican States in article 123, section A, section VI:
"The minimum wage may not be used as an index, unit, base, measure or reference for purposes unrelated to its nature" (as of the reform of January 27, 2016).
For this reason, it was necessary to create a unit of measurement to replace the minimum wage as an index, unit, base, measure or reference; this is how the UMA was born.
How was the UMA incorporated?
However, the legislators at that time limited themselves to incorporating a transitory article (Third) for the application of the UMA, which was worded as follows:
"As of the effective date of this Decree, all mentions of the minimum wage as a unit of account, index, base, measure or reference to determine the amount of the obligations and assumptions provided for in federal, state and Federal District laws, as well as in any legal provision emanating from all of the foregoing, shall be understood to refer to the Unidad de Medida y Actualizacion."
And in the fourth transitory article of the same decree, a term was established for the authorities, both of the Legislative and Executive Branches, of the three levels of government, to make the necessary adjustments to all the regulations in which it was required to modify the expressions: "times the minimum wage", "X minimum wages" and others of the like in all laws and ordinances under their jurisdiction to "eliminate the references to the minimum wage as a unit of account, index, base, measure or reference and replace them with those related to the Unidad de Medida y Actualidad"(Unit of Measurement and Updating).
For this titanic task, they set a deadline of one year from the entry into force of the reform.
Well, last January 27th was the fifth anniversary of the deadline set by the legislators to make the adjustments to all the legal norms under their jurisdiction and we still have not seen the complete change.
A few laws and provisions have been modified in an incipient manner, but a large number of legal regulations are still lacking.
Among the laws that are still pending the replacement of the term "minimum wage" with the term "Unidad de Medida y Actualización" are the Income Tax Law and the Social Security Law.
Confusion over terms between UMA and Minimum Wage
This lack of updating to such laws, causes that when calculating payrolls, we must be reading in the law the expression "minimum wage", but applying the current value of the UMA, and as this has an unconventional period of validity (February of one year to January of the following year), it generates the need to be pending because in each January a value of the UMA is applied and from February of each year the new value is applied, This generates the need to be aware of the fact that in each month of January a value of the UMA is applied and from February of each year the new value is applied, generating the need to update our payroll systems to make the correct calculation of different amounts that impact the calculations of taxes applicable to income from wages, salaries and in general those derived from an employment relationship.
Examples of the figures that are updated in conjunction with the increase in the value of the UMA are as follows:
Social Security Law
Concepts excluded from the Base Contribution Salary:
| Concept | Index, base, measure or reference | Legal basis | Amount as of February 2023 |
| Food and lodging, when they are onerous. It is understood that they are onerous when they are charged to the worker. | Charging at least 20% of the value of the UMA | LSS art. 27, sect. V | $20.75 x day ($103.74 x 20%) |
| In-kind or cash food rations | That do not exceed 40% of the value of the UMA | LSS art. 27, sect. VI | $41.50 x day ($103.74 x 20%) |
Other references:
| Concept | Index, base, measure or reference | Legal basis | Amount as of February 2023 |
| Upper limit of the Base Contribution Salary | 25 UMA | LSS art. 28 | $2,593.50 per day ($103.74 x 25) |
| Daily fixed employer's contribution for sickness and maternity insurance benefits in kind | 20.40% of the value of the UMA | LSS art. 28 | $21.16 x day ($103.74 x 20.40%) |
| Amount on the basis of which the additional contribution for the benefits in kind branch of health and maternity insurance is determined. | 3 UMA | LSS art. 106, sect. I | $311.22 x day ($103.74 x 3) |
| Fine for failure to enroll workers in the mandatory IMSS system | From 20 to 350 UMA | LSS art. 304 B, sub-section IV | From $2,074.80 TO $36,309.00 ($103.74 x 20) ($103.74 x 350) |
| Penalty for failure to file salary modifications | From 20 to 125 UMA | LSS art. 304 B, section II. | From $2,074.80 TO $12,967.50 ($103.74 x 20) ($103.74 x 125) |
Income Tax Law
Income exempt from income tax:
| Concept | Index, base, measure or reference | Legal basis | Amount as of February 2023 |
| Aguinaldo | 30 UMA per year | LISR art. 93, sub-section XIV | $3,112.20 ($103.74 x 30) |
| Vacation bonus | 15 UMA per year | LISR art. 93, sub-section XIV | $1,556.10 ($103.74 x 30) |
| Sunday premium | 1 UMA for each Sunday worked | LISR art. 93, sub-section XIV | $103.74 |
| OCT | 15 UMA per year | LISR art. 93, sub-section XIV | $1,556.10 ($103.74 x 30) |
| Overtime | Exemption limit: 5 UMA | LISR art. 93, sub-section I | $518.70 ($103.74 x 5) |
| Savings fund | 1.3 UMA per year | LISR art. 27, section XI, fourth paragraph | $49,197.72 ($103.74 x 30.4 x 12 x 1.3) |
| Welfare benefits. Limit on the sum of income plus capped welfare benefits. | 7 UMA per year | LISR art. 93, penultimate paragraph | $264,910.80 ($103.74 x 30.4 x 12 x 7) |
| Exempt welfare benefits for which the sum of income plus capped welfare benefits exceeds 7 UMA per year. | 1 UMA per year | LISR art. 93, penultimate paragraph | $37,844.40 ($103.74 x 30.4 x 12) |
| Termination benefits | 90 UMA for each year of seniority | LISR art. 93, sub-section XIII | $9,336.60 ($103.74 x 90) |
With this sample of the most relevant references related to payrolls, we can familiarize ourselves with the new values that will be in effect during the next 12 months and that we will have to use when calculating payrolls for the remainder of this year.
I hope this information has been useful and we will see you in the next article.
Finally, I invite you to subscribe to our blog to stay up to date with payroll changes.
See you next time!
