Countries › Mexico › Guide › 8. Immigration › Relocating staff to Mexico: tax residence, the nonresident wage tax, the 183 day exemption, IMSS registration and social security agreements

Relocating staff to Mexico: tax residence, the nonresident wage tax, the 183 day exemption, IMSS registration and social security agreements

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Last verified: 2026-10-26 · Status: Stable

Moving an employee to Mexico raises two questions apart from immigration: when the person becomes a Mexican tax resident taxed on worldwide income, and how wages for work done in Mexico are taxed while the person is still a nonresident. A nonresident pays no Mexican tax on the first MXN 125,900 of wages for work in Mexico in a 12 month period, 15 percent up to MXN 1,000,000 and 30 percent above, but wages paid by a foreign employer with no Mexican establishment are exempt if the stay is under 183 days in 12 months. Employees working for a Mexican employer must be registered with IMSS like anyone else; Mexico's social security institute reports totalization agreements with only two countries, Spain and Canada, so most assignees contribute in both systems.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Conversions are for orientation only.

Key facts

Annual wages for work in Mexico exempt for a nonresident	125900 MXNLISR art. 154 section I, as of 2026-10-26 · in force
Rate on nonresident wages above the exempt amount up to MXN 1,000,000	15 %LISR art. 154 section II, as of 2026-10-26 · in force
Rate on nonresident wages above MXN 1,000,000	30 %LISR art. 154 section III, as of 2026-10-26 · in force
Stay below which wages paid by a foreign employer without a related Mexican establishment are exempt	183 days in 12 monthsLISR art. 154, as of 2026-10-26 · in force
Days before a change of tax residence by which the departure notice must be filed	15 daysCFF art. 9, final paragraph, as of 2026-10-26 · in force
Countries with which IMSS reports social security totalization agreements	2 countriesIMSS pensions FAQ (Spain and Canada), as of 2026-10-26 · in force

The rule

1. Tax residence follows the home, not the visa. Individuals who have established their home in Mexico are Mexican tax residents; if they also have a home in another country, they are residents when their center of vital interests is in Mexico, including when more than 50 percent of their income in the calendar year has a Mexican source or when their main professional activity is in Mexico. Mexican nationals are presumed residents. Individuals who stop being residents must file a notice with the tax authority no later than 15 days before the change of tax residence, or they remain residents; and those who move to a preferential tax regime country remain residents for that year and the next five unless the new country has a broad information exchange agreement and a mutual assistance treaty with Mexico.
Cost to do it: No fee. Professional tax advice is market priced.
Example: A Chilean finance director moves with family to a rented house in Monterrey for a three year assignment and keeps no home in Chile: the director becomes a Mexican tax resident from the move, with Mexican salary withheld by the employer under the resident wage rules. / Not applicable.Código Fiscal de la Federación (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), CFF art. 9, 2021-11-12 official text · verified 2026-10-26

2. Nonresident wages for work in Mexico. Wages and other income from subordinate personal services have a Mexican source when the service is performed in Mexico. A nonresident is taxed on the income in a calendar year (or 12 month period) as follows: the first MXN 125,900 exempt, 15 percent on the excess up to MXN 1,000,000, and 30 percent above MXN 1,000,000. The payer withholds if it is a Mexican resident or a foreign resident with a permanent establishment related to the service; otherwise the employee pays by return within 15 days of receiving the income. Wages paid by a foreign resident with no permanent establishment in Mexico (or whose establishment is unrelated to the service) are exempt if the stay in Mexico is less than 183 calendar days, consecutive or not, in 12 months; the exemption does not apply if the payer has any establishment in Mexico related to the service, even if not a permanent establishment.
Cost to do it: Tax as computed under the article; no filing fee. Late filing triggers surcharges and penalties under the Federal Tax Code.
Example: A UK engineer, not a Mexican tax resident, works 200 days in Mexico in 2026 on a project and receives MXN 1,800,000 for that work from the UK employer, which has a related permanent establishment in Mexico: exempt MXN 125,900; 15 percent of MXN 874,100 = MXN 131,115; 30 percent of MXN 800,000 = MXN 240,000; total MXN 371,115, withheld by the establishment. / Pay about USD 96,443; tax about USD 19,884 at 18.6638.Ley del Impuesto sobre la Renta (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), LISR art. 154, 2013-12-11 official text · verified 2026-10-26

3. Treaties can override the domestic rule. Where a double taxation treaty applies, its employment income article decides which country may tax. For example, the Argentina Mexico agreement to avoid double taxation (approved in Argentina by Law 27.334, in force 23 August 2017) lets wages of an Argentine resident for work in Mexico be taxed only in Argentina if the person stays in Mexico no more than 183 days in any 12 month period beginning or ending in the tax year, the pay is from an employer that is not resident in Mexico, and the pay is not borne by a permanent establishment or fixed base in Mexico.
Cost to do it: No fee; treaty relief may require a tax residence certificate from the home country.
Example: An Argentine resident technician sent by a Buenos Aires employer for a 90 day installation, paid from Argentina and not charged to any Mexican establishment, is taxable only in Argentina on that pay under art. 15(2). / Not applicable.Agreement between the Argentine Republic and the United Mexican States to avoid double taxation (Argentine Law 27.334, published BO 21 December 2016, in force 23 August 2017), Art. 15 (dependent personal services); art. 30 (entry into force), 2017-08-23 official text · verified 2026-10-26

4. Social security registration and totalization. Anyone who provides paid, personal and subordinate work to an employer in Mexico, whatever the employer's legal form, is a compulsory insured person under the Social Security Law, so foreign employees of a Mexican entity must be registered with IMSS. The Mexican Social Security Institute states that it has week totalization agreements with two countries, Spain and Canada, under which a worker who contributed to IMSS and to the other country's institution can combine periods, for example when the worker lacks the 500 weeks required under the pre July 1997 law.
Cost to do it: Employer and worker IMSS contributions on the salary, as for Mexican staff (see the labor social security page).
Example: A Canadian manager hired by a Mexican subsidiary is registered with IMSS from the first day of work; later Canadian and Mexican contribution periods may be combined under the Mexico Canada agreement for pension eligibility. / Not applicable.Ley del Seguro Social (Chamber of Deputies consolidated text, last reform DOF 15 January 2026); IMSS pensions FAQ on totalization with Spain and Canada, LSS art. 12 section I, 1995-12-21 official text · verified 2026-10-26

Band (annual)	Rate	Tax on MXN 1,800,000	USD
Up to MXN 125,900	Exempt	0	0
MXN 125,900.01 to 1,000,000	15%	131,115	about 7,025
Above MXN 1,000,000	30%	240,000	about 12,859
Total	about 20.6% effective	371,115	about 19,884

Mexican tax on wages of a nonresident for work in Mexico (LISR art. 154), with a worked case at MXN 1,800,000; USD at 18.6638.

Worked example

A US company sends an engineer to its Mexican subsidiary for 10 months, paid MXN 150,000 a month (about USD 8,037 at 18.6638) by the subsidiary.
Immigration: the subsidiary obtains its INM certificate and a job offer temporary residence with work permit for the engineer.
Tax: the work is done in Mexico for a Mexican payer, so the 183 day exemption does not apply; if the engineer keeps a home in the US and is not a Mexican tax resident, the subsidiary withholds under the nonresident bands, and if the engineer sets up home in Mexico, resident wage withholding applies instead.
Social security: as an employee of the subsidiary, the engineer must be registered with IMSS; the United States is not among the two countries IMSS lists for totalization, so contributions may be due in both countries depending on US rules.

Step by step

1. Decide whether the assignee will set up a home in Mexico, and test the center of vital interests rules in CFF art. 9.
2. Identify the payer: a Mexican entity or a foreign employer with a related Mexican establishment must withhold.
3. Count days in Mexico in any 12 month period to test the 183 day exemption and any treaty rule.
4. Register Mexican employees with IMSS from day one, and check whether Spain or Canada coverage can be combined.
5. On departure, file the change of tax residence notice no later than 15 days before the move.

Common traps

Relying on the 183 day rule with a Mexican payer. The domestic exemption covers only wages paid by foreign residents without a related establishment in Mexico (LISR art. 154).
Leaving without the tax notice. A person who does not file the notice keeps Mexican tax residence (CFF art. 9).
Assuming a home country certificate of coverage works. IMSS reports totalization agreements only with Spain and Canada (IMSS FAQ).
Treating the visa as a tax decision. Tax residence depends on home and vital interests, not on the condition of stay (CFF art. 9).

Sources

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