Line-Item Descriptions in Mexico

Invoice charges, explained.

Updated on March 10th, 2023

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Below you will find the different line items you will see on an invoice, with a corresponding description. If you have further questions, please submit a ticket using the Help widget at the bottom of the page.

Allowances. Payment of an allowance. Examples of this are car, cell phone, or fitness allowances.

Bonus. Additional remuneration added to the supported employee’s payment. 

Christmas Bonus. The Federal Labor Law establishes in Article 87: "Workers shall be entitled to an annual Christmas bonus, which must be paid before December 20, equivalent to at least fifteen days of salary.

Commissions. Additional remuneration added to the supported employee’s payment due to sales generation.

Compensation. The amount of money your supported employee receives in exchange for their services.

Disability Insurance. Disability and life insurance protect workers if an accident or illness occurs outside the work environment and results in a state of disability. It also protects their families in the event of the insured or pensioner’s death. This insurance is divided into two branches: disability and life.

Employee Expense. Payment of an expense.

Employer Health Insurance. Contributions are made on a bimonthly basis: 0.225% of the contribution base salary for severance at advanced and old age (on a bimonthly basis) and an amount equivalent to 5.5% of the general minimum wage in Mexico City for each day contributed, as a social contribution.

Employer Infonavit. The employer's contribution to Infonavit (Instituto del Fondo Nacional de la Vivienda para los Trabajadores) is an obligation established by law for the relationship between employers and workers at the national level. The objective is to ensure the rights and benefits of employees.

Employer Nursery IMSS. The nursery IMSS is a center of attention, care, and integral development for workers' children, per articles 201 to 207 of the Social Security Law.

Employer Pension Contribution. Between January 1, 2021, and January 31, 2022, the employer's contribution for severance and old age will remain at 3.150% and 2% for retirement.

Employer Sickness and Maternity. Insurance covering medical and hospital care, as well as benefits in kind. The fixed contribution is 20% of the monthly Unit of Measurement (UMA) and is payable by the employer. 

Employer Social Contributions. The employer's social contribution is the employer's portion of contribution to the general social security fund.

Employer Unemployment Insurance. Insurance that provides benefits to those unemployed in the formal sector, regardless of the cause of unemployment. Specifically, it grants a benefit floor equivalent to one month's minimum salary for up to six months.

Federal Tax. These are related to economic activities carried out within the country, including income tax (Impuesto sobre la renta [ISR]) and value-added tax (VAT).

Grocery Coupons. Grocery Coupons are a social welfare benefit, which means they must be provided to all employees equally. There is an established 7% cap on the monthly salary for this benefit. It’s tax-free and paid on a Si Vale card that can be used in supermarkets and some other shops. The 7% is also capped by the ISR to 30 daily UMAs, which is the economic reference in Mexican pesos to determine the payment amount of the obligations and assumptions provided by federal laws.

Insurance Premium. The premium for a private insurance plan through Velocity Global.

Life Insurance Contribution. As part of disability and life insurance, this contribution is made on a tripartite basis. Employers, workers, and the federal government are responsible for covering 1.75%, 0.625%, and 0.125% of the base contribution salary, respectively.

PTO Payout. Vacations are paid as days worked, and in addition, a vacation premium must be paid. Both labor rights, PTO and the vacation premium, are regulated by the Mexican Federal Labor Law.

State Payroll Tax. A fee that the state requires from employers for the transactions corresponding to the labor relations they have. Among the items taxed locally for the payment are salary and labor benefits.

Vacation Bonus. The amount of money paid to the worker for their vacations. The vacation bonus/premium is recognized in the Mexican Federal Labor Law through articles 76 through 81.

Velocity Global EoR Fee. Velocity Global’s fee.

Wire Transfer Fee. Payment for the cost of a wire transfer.

Workers Compensation Insurance. Protects the worker if they suffer an accident or illness related to work or an accident that occurs when traveling from their home to workplace (or vice versa).