Mexico ISR Income Tax 2026: Personal Brackets, Corporate Rate and Filing Rules
Mexico taxes income through the Impuesto sobre la Renta (ISR), and the system looks familiar to anyone who has dealt with progressive personal tax plus a flat corporate rate — but the details, from monthly withholding tariffs to the famous 35% top bracket, are distinctly Mexican. Whether you are an employee in Mexico City, a freelancer billing in dollars, or a company with a Mexican subsidiary, here is how ISR works in 2026, with the year's official figures.
Who pays ISR in Mexico
Mexico taxes residents on worldwide income and non-residents on Mexican-source income (withholding at source). The two taxpayer categories are:
- Personas físicas (individuals): employees, freelancers, landlords, business owners.
- Personas morales (companies): Mexican corporations and foreign entities with a permanent establishment in Mexico.
There is no joint filing for married couples — each individual files separately.
Personal ISR: progressive rates up to 35%
Individual ISR uses a progressive tariff with 11 brackets. The 2026 monthly withholding tariff (Article 96 of the Income Tax Law, published in Annex 8 of the 2026 Resolución Miscelánea Fiscal, Diario Oficial 28 December 2025) sets the top bracket as follows:
| Monthly taxable income (MXN, 2026) | Marginal rate |
|---|---|
| Up to $425,642.00 | 1.92% – 34%, rising through the brackets |
| Over $425,642.00 | 35% (fixed fee $133,488.54 on the excess) |
In plain terms: once your monthly taxable base passes about $425,642 MXN (roughly US$22,000–23,000 at typical 2026 exchange rates), every additional peso is taxed at 35%. The equivalent annual tariff (Article 152, used for the yearly return) puts the 35% bracket at roughly $3.9 million MXN per year. Lower brackets start at 1.92% and climb through 6.4%, 10.88%, 16%, 17.92%, 21.36%, 23.52%, 30%, 32% and 34% — the full table is in the SAT's published tariff.
A few practical notes:
- Employees have ISR withheld from each paycheck by their employer (the monthly tariff is applied to each payroll), so most employees with a single job do not need to file an annual return unless they have other income.
- Freelancers and business owners (actividad empresarial y profesional) compute their own tax on net income and make monthly provisional payments (see below).
- Deducciones personales (personal deductions — medical expenses, school transport, mortgage interest on a primary home, retirement contributions, funeral costs) can reduce the annual taxable base, subject to caps. They only help if you file the annual return.
Corporate ISR: flat 30%
Companies pay a flat 30% on their resultado fiscal (taxable profit), per Article 9 of the Income Tax Law. This rate has been unchanged since 2014. Key mechanics:
- Taxable profit = accruable income minus authorized deductions, with an annual inflation adjustment.
- Companies track CUFIN (net taxed-profit account) and CUCA (capital contributions account) — distributions from CUFIN avoid a second layer of corporate tax.
- Dividends paid to individuals (Mexican or foreign) carry an additional 10% withholding on top of the 30% corporate tax.
Monthly provisional payments (pagos provisionales)
Most taxpayers cannot wait until year-end. Provisional ISR payments are due by the 17th of each month for the previous month:
| Taxpayer | Basis |
|---|---|
| Companies (régimen general) | Prior-year profit coefficient (coeficiente de utilidad) applied to current nominal income |
| Individuals with business/professional activity (Art. 106) | Monthly net income at the tariff rate |
| Landlords (arrendamiento, Art. 116) | Monthly rental income |
| Employees | Withheld by the employer each payroll — no separate payment needed |
Payments made during the year are credited against the annual return. Taxpayers under the simplified RESICO regime for individuals make monthly payments that are final (no annual return needed) — see the companion guide on small-business taxes.
Annual returns: the deadlines
| Taxpayer | Deadline (for the prior tax year) |
|---|---|
| Personas morales (companies) | 31 March |
| Personas físicas (individuals) | 30 April |
So in 2026, companies filed for tax year 2025 by 31 March 2026, and individuals file by 30 April 2026. Individuals who must file include: annual income above $400,000 MXN, income from two or more employers, business/professional/rental income, anyone who wants to claim personal deductions, and anyone with a tax balance to pay or refund to claim.
Are you a Mexican tax resident?
Tax residency (Article 9 of the Federal Fiscal Code) follows these tests:
- Casa habitación: if you have established your home in Mexico, you are a resident — full stop.
- Center of vital interests: if you have homes in two countries, you are a Mexican resident only if your center of vital interests is in Mexico — meaning either more than 50% of your calendar-year income comes from Mexican sources, or your main center of professional activities is in Mexico.
- Mexican nationals are presumed resident unless they prove otherwise.
- Companies are resident where their principal administration or effective management sits.
Note that Mexican domestic law has no statutory 183-day counting test — the 183-day idea comes from treaty tie-breakers and SAT practice, not the legal residency definition. Anyone changing tax residence must file a notice with the SAT within 15 days before the change.
ISR at a glance (2026)
| Item | 2026 figure |
|---|---|
| Top personal rate | 35% above $425,642 MXN/month |
| Corporate rate | 30% flat |
| Provisional payments | By the 17th of each month |
| Annual return — companies | 31 March |
| Annual return — individuals | 30 April |
| UMA (reference value) | $117.31 MXN/day (from 1 Feb 2026) |
Next steps
- Employees: check a recent pay stub (recibo de nómina) — your employer should be withholding ISR each payroll; if you had two employers or extra income in 2025, you likely need to file by 30 April 2026.
- Freelancers and landlords: confirm you are making provisional payments by the 17th each month, and evaluate whether the RESICO regime (1%–2.5% on gross income) would be cheaper than the general regime for you.
- New arrivals: pin down your residency status early — the casa habitación test can make you a Mexican tax resident sooner than you expect, which changes your worldwide reporting.
- Companies: calendar the 31 March deadline and keep CUFIN/CUCA records current; dividend distributions need the extra 10% withholding planned in.