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Employee Payments in Mexico

When our clients send employees on assignment to Mexico (or employ Mexican citizens), a very basic question arises of when and how payslips are issued to the employee.  Because payroll is being run through the local employer of record in Mexico, issuing payslips is one of the services that we handle for our Shield GEO clients. 

Just as with the home country payroll, payslips detail the amount of compensation, tax withholding and any other statutory contributions.  Although this seems to be similar in Mexico, there are a few unique steps that we must take to meet local rules, and so we inform our clients of what to expect.

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The Payslip Process in Mexico

The process of issuing payslips has to comply with Mexican law, and they first must be approved and released by the SAT (Mexican Tax Authorities) before we can send the employee or client an official copy.  In order for our payroll system to issue the payslips, they are electronically stamped after the SAT match up the amount of money sent from the employer’s bank account to the employee’s bank account.

As we outlined in this related article, a new law in Mexico requires that all compensation be paid in pesos through government approved banks, so this is one way that the authorities can verify that this rule is being followed.  It also ensures correct tax withholding and payment.

Once all the amounts have been matched and verified, we will send the payslip to the employee’s personal email account as a PDF file, and the client will also receive a copy from our account manager at Shield GEO.

What is the Frequency of Payslips?

Most employees on assignment in Mexico will receive payslips twice a month.  If the employee is a ‘blue collar’ worker they will be paid weekly.  We also request all employees to sign copies of their payslips every 2 months (four PDFs) to acknowledge receipt and accuracy.

How Do We Make Sure That the Payroll is Accurate and Timely?

One of the more important parts of our GEO service to clients is running a local, compliant payroll in Mexico.  This ensures that all expat and local employees are being paid in accordance to Mexican regulations, and that employees receive the amount of compensation that they expect.

We accomplish this goal through our local partner as employer of record, who is a legally registered entity that can run the Mexican payroll efficiently and accurately.  We provide oversight of the process and are always available to respond to questions.  This service is only one aspect of our GEO solution for international employment, and we are able to handle the immigration, employment and payroll challenges facing any size company doing business abroad.

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