End-to-end payroll processing for Mexican employers: calculates ISR withholding using the Art. 96 LISR progressive table, computes IMSS/INFONAVIT/AFORE employer and employee quotas under the 2020 pension reform, generates CFDI Nomina 1.2 XML via PAC, pays Impuesto Sobre Nominas (ISN) to the state treasury, and files monthly SUA and SAT declarations.
Gather all employer and employee master data required before any computation can begin. This includes the employer RFC, IMSS patron registration number (Registro Patronal), state of operations for ISN, and for each employee: RFC, CURP, IMSS NSS (Numero de Seguridad Social), salary type (fixed or variable), gross daily integrated salary (Salario Diario Integrado — SDI), and any subsidio para el empleo entitlement. Confirm the payroll period (weekly, biweekly, or monthly).
Calculate ISR to withhold per employee for the pay period using the Art. 96 LISR progressive table and the monthly/weekly/biweekly tax tables published in Annex 8 of the Resolucion Miscelanea Fiscal (RMF). Apply the Subsidio para el Empleo (SPE) table to reduce or eliminate ISR for lower-income workers. For variable-pay employees apply the Art. 96 procedure using the ratio of ordinary income to annual projection. Verify cumulative ISR year-to-date to avoid over/under-withholding.
Calculate the employer and employee IMSS social security quotas for all five insurance branches using the SDI capped at the applicable UMA ceiling per branch. Apply the 2020 pension reform graduated increases to the Cesantia en Edad Avanzada y Vejez (CEAV) employer rate, which escalates annually through 2030. Compute the INFONAVIT employer contribution (5% of SDI) and the employer AFORE SAR contribution (2% of SDI, Retiro branch). Use SUA (Sistema Unico de Autodeterminacion) to generate the bimonthly IMSS payment file.
Generate a CFDI type N (Nomina) with Complemento de Nomina 1.2 for each employee for the pay period. The XML must include TipoNomina (O=ordinary or E=extraordinary), FechaPago, FechaInicialPago, FechaFinalPago, TotalDiasPagados, TotalPercepciones, TotalDeducciones, TotalOtrosPagos (for SPE), and the full Receptor block with RFC, CURP, NSS, TipoContrato, TipoJornada, TipoRegimen, Departamento, and Puesto. Submit each CFDI to an authorized PAC for timbrado; the PAC returns the UUID (folio fiscal) and TimbreFiscalDigital. Deliver the CFDI XML and PDF representation to each employee.
Calculate and pay the Impuesto Sobre Nominas (ISN) to the tax authority of each state where employees work. ISN is levied by all 32 states and CDMX at rates ranging from 1% to 3% of total taxable payroll. The taxable base and exact rate vary by state — confirm the current rate and any exemptions with the state revenue law (Ley de Hacienda or Codigo Fiscal Estatal). Payment is typically due by the 17th of the month following the payroll period, filed via the state portal (e.g., Sistema Pago Referenciado for CDMX).
File the monthly employer ISR withholding declaration with SAT (Declaracion Mensual de Retenciones) via the Declaracion y Pago portal by the 17th of the following month. SAT pre-fills the declaration from CFDI Nomina UUID data. Reconcile total ISR withheld per the payroll register against CFDI Nomina records. Reconcile Subsidio para el Empleo delivered to employees against ISR withheld. Retain all CFDI XMLs, SUA files, and ISN receipts for the 5-year CFF Art. 30 retention period.
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