Zentric is ready for 2023

Vacation 2023

• After more than 50 years, the so-called "dignified vacations" have been approved. Workers will now enjoy 12 days of vacation, with pay, after the first working year.
• Within the first 5 working years, 2 days are added for each year worked. Subsequently, 2 days of vacation are increased, but for every 5 working days.
• Of course, the increase in paid vacation days also impacts the "cost of payroll" for companies. 
• This cost varies depending on different factors such as the employee's base salary, the general minimum wage and the geographic region of the country, among others.

Update of ISR (Income Tax) Rates

• The SAT informed that an adjustment will be made to income tax rates for 2023, due to the accumulated inflation level from November 2020 to November 2022.
• Cumulative inflation is 15.08%. The law states that tariffs must be renewed when they exceed 10%.
• The update of the personal income tax rate will prevent wage increases granted by companies from translating into a higher tax burden for workers.
• This means that companies must be prepared to make the change in our payroll calculations. We must be certain that our payroll system is properly updated according to the law.

UMA (Updated Measurement Unit) and UMI (Infonavit Mixed Unit)

• The UMI becomes effective on January 1 of each year. In order to determine its value, it is necessary to take into account the minimum wage in effect and the UMA to obtain the value for the current year.
• The UMA will be effective as of February 2023.
• An intense period of updates is expected for 2023, so it is recommended that companies are up to date, in order to ensure that our calculations are correct and avoid penalties, fines and audits by the law.

Minimum wages

• The percentage increase in minimum wages for 2023 is 20% with respect to 2022.
• Taking this comparison in "pesos and cents", this increase is the highest ever seen in Mexico, equivalent to more than $1,000.00 per month.
• The bad news for employees is that there is no legal obligation for employers to increase salaries above the minimum.
• All workers earning more than $6,306.18, outside the northern border zone, and more than $9,497.26 in the northern border zone, cannot demand that their wages be increased in the same proportion that the minimum wage was increased.

CEAV Contributions (Old Age Unemployment and Old Age)

• In December 2020, the law was amended to increase the premiums for the Severance and Old Age Insurance ( CEAV) that employers contribute. This amendment is effective as of January 1, 2023.
• This modification impacts employers, as the cost of payroll has a consequent increase.
• Starting in 2023, a period of eight years begins during which this quota will be "smoothly" and gradually increased.
• The CEAV contribution will no longer be the same for all workers, but will be staggered depending on each worker's base salary.

What do you think of these payroll changes and adjustments for 2023, do you think they will benefit or affect your company?

We take this opportunity to invite you to a free Webinar where David Lozada, our Tax Advisor with more than 30 years of experience, and Carlos de León, CEO of Zentric, will deepen in these topics to start 2023 prepared.

The appointment is next January 11, at 11 am, and you can register for free here.