Dominical Premium in Mexico: what is it and how is it calculated?

Mexico is a federation country made up of 31 states, each one represented by its own constitution, judiciary, its congress and an elected governor.

It is the second largest economy country in Latin America and the third largest country with which the United States does business. The same law is the one that establishes the maximum of regular hours of work in the day and within it is the Sunday premium in Mexico.

What is the Sunday premium in Mexico?

Sunday or Sunday cousin says that employees who must work on Sunday must, at a minimum, receive an additional 25% of their daily salary in addition to your normal daily salary.

A company must make all salary and legal payments from a bank account in the country, which can create additional deadlines that must be taken into account when setting up payroll in that country.

Payments in Mexico must be created with a debit account and the recipient of the payment must be a beneficiary who is registered. This requirement is proposed and is a norm indicated by the General Decree that applies to Credit Institutions that is established by the National Banking and Securities Commission.

In Mexico, payments created with a Mexican debit account will require the recipient of the payment to be a registered payee. This is a regulatory requirement indicated in the General Decree applicable to Credit Institutions as established by the National Banking and Securities Commission.

Payments that require beneficiary registration include the following:

• Priority payments (international)
• SPEI priority payment (national)
• ACH de México credits: general staff, payroll and online payroll

Minimum wage and bonuses

The minimum wage in Mexico is currently low, but it is rising at a rapid rate. For 2020, the rate increased by 20% to 123.22 pesos per day. This affects a significant number of people: around 11 million Mexican workers receive the minimum wage.

Then for 2021, this minimum wage increased to 141.70 pesos per work day, an increase in an independent recovery amount of 10.46 pesos plus a 6% increase due to inflation.

Employee salaries can be paid weekly, biweekly or monthly, according to the conditions agreed in the employment contract. Payments can be made electronically if a new hire requests permission to process a bank payroll account.

Employees receive a bonus from the thirteenth month at the end of the year, which must be paid before December 20. Some employers also pay a 14th month bonus, in which they share in the previous year's earnings; These payments must be made before May 31st.

Mexicans work some of the longest employee hours in the world. Officially, the maximum workweek is 48 hours and is spread over six days with eight-hour shifts. However, many companies condense 48 hours into five days to give their workers two days off each week. In reality, some companies choose to ignore these regulations. Overtime is paid at twice the normal wage for the first nine hours of the week, and at triple for any other amount.

Work week and overtime

The Federal Labor Law (FLL) establishes a maximum of regular working hours per day. The normal workweek ranges from 40 to 48 hours. Employees work a maximum of six days a week and are paid on the seventh day.

Employers cannot allow employees work more than eight hours during the day, seven hours for night work, and seven and a half hours for a shift that is both day and night. Employees are provided at least one day off, which employers are urged to provide on Sundays. Employees who work on Sundays receive a bonus equal to 25% of their usual daily salary.

However, even if the employee does not work on Sundays, he is paid a regular salary on Sundays. Therefore, although employees in Mexico are not required to work more than 48 hours a week, they are paid for seven days or 56 hours.

Employees must work up to, but not more than, three hours a day and nine hours a week of overtime, with overtime being paid at a double wage rate. Because employees can choose to work overtime beyond nine hours, they could have a cause action, including a penalty for employers to pay triple hours for hours after 9:00 hours.

Free days

Holidays

Employees who work for an employer are entitled to the following paid vacations, in addition to a 25% vacation bonus:

• Six days of paid vacation after one year of work.
• Two additional days annually for each additional year of service until the end of the employee's fourth year with the employer.
• Two days of paid vacation every five additional years of work.

Holidays

There are at least seven mandatory paid holidays annually (January 1, February 5, March 21, May 1, September 16, November 20, and December 25).

Additional payment considerations in Mexico

There are several other payment considerations, including the following:

• Christmas Bonus- Employers must pay employees at least 15 days' salary by December 20 of each year, based on the number of days worked that year by the employee. For example, an employee who has worked eight months is entitled to 10 Christmas bonus days.
• Special bonuses- Employees working in areas with high employment rates will be entitled to bonuses based on factors such as work habits (punctuality) and company productivity.

Employee wages must be reviewed every year; Collective agreements must be changed every two years.

After their first year of operations, Mexican employers must pay approximately 10% of their annual net income among all employees.

Taxes in Mexico

The fiscal year runs from January 1 to December 31. Mexican tax authorities include the following agencies:

• Ministry of Finance and Public Credit (Ministry of Finance and Public Credit)
• Tax Administration Service (Tax Administration Service)
• Instituto Mexicano del Seguro Social (Instituto Mexicano del Seguro Social)
• Institute of the National Housing Fund for Workers

Residents working in Mexico must obtain a tax identification number (RFC) and a CURP (Uniform Population Control). Mexican employers are required to register all employees with the Mexican tax authorities.