Taxes & Deductions: A Deep Dive for Gig Workers in Mexico

Mexico's tax system for gig workers is administered by the SAT (Servicio de Administración Tributaria). The RESICO simplified regime and standard professional income regime provide different tax approaches. Understanding these options and available deductions enables Mexican gig workers to optimize their tax position.

1. RESICO — Simplified Tax Regime

Low tax rates from 1% to 2.5% on revenue for qualifying taxpayers

RESICO (Régimen Simplificado de Confianza) provides dramatically reduced tax rates for individuals with annual income up to MXN 3.5 million: 1% on monthly revenue up to MXN 25,000; 1.1% up to MXN 50,000; 1.5% up to MXN 83,333; and 2.5% up to MXN 291,666. Tax is calculated on gross revenue — no expense deductions needed. RESICO is available to individuals (personas físicas) who invoice exclusively through CFDI. This regime makes Mexico extremely tax-friendly for qualifying gig workers. Monthly declarations and payments are required.

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SAT — RESICO: https://www.sat.gob.mx/

2. Régimen de Actividades Empresariales y Profesionales

Standard regime with progressive rates and full expense deductions

Gig workers not eligible for RESICO use the standard professional/business regime. Progressive rates from 1.92% to 35% apply to net taxable income (after deductions). The regime allows deduction of all business expenses and provides more flexibility. For gig workers with significant deductible expenses, this regime may result in lower tax than RESICO. Annual returns are filed in April. Monthly provisional tax payments are required.

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SAT — Professional Income: https://www.sat.gob.mx/

3. Personal Deductions (Deducciones Personales)

Annual personal deductions reducing taxable income

Mexican taxpayers can deduct: medical and dental expenses (self, spouse, dependents); hospital expenses; health insurance premiums; mortgage interest (for primary residence); charitable donations (to authorized institutions); school transportation; funeral expenses; and mandatory pension contributions. Combined personal deductions are capped at the lesser of 15% of total income or 5 UMAs annually. AFORE voluntary contributions and PPR contributions provide additional deductions up to 10% of income.

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SAT — Personal Deductions: https://www.sat.gob.mx/

4. Business Expense Deductions

Deductible costs under the professional/business regime

Under the standard regime, deductible business expenses include: equipment depreciation (computers 30%, vehicles 25%, furniture 10%), office rent, internet and phone, professional development, vehicle expenses (deductible up to MXN 175,000 vehicle value), travel, marketing, accounting fees, insurance, and employee costs. All deductions require CFDI (electronic invoices). The choice between RESICO and standard regime should be evaluated based on actual expense levels.

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SAT — Business Deductions: https://www.sat.gob.mx/

5. IVA — Value Added Tax at 16%

VAT obligations for Mexican gig workers

Mexico's IVA rate is 16% (0% for food, medicine, and border regions). RESICO taxpayers are still subject to IVA separately. Gig workers must charge 16% IVA on services (unless exempt) and can credit input IVA on purchases. Monthly IVA declarations are required. Export services are zero-rated (0% IVA). The IVA for digital platforms regime applies specific rules to platform-mediated services.

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SAT — IVA: https://www.sat.gob.mx/

6. Digital Platform Tax Withholding

ISR and IVA withholding by digital platforms

Since 2020, digital platforms (Uber, Rappi, DiDi, Airbnb, etc.) are required to withhold ISR (income tax) and IVA from payments to gig workers. ISR withholding rates vary by platform type and income level. The withheld amounts are credited against annual tax liability. Platform workers can opt for the withholding to be their definitive tax (without annual filing) if income is below MXN 300,000. This simplifies compliance for lower-earning platform workers.

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SAT — Digital Platforms: https://www.sat.gob.mx/

7. CFDI — Electronic Invoicing

Mandatory digital invoicing for all taxpayers

All Mexican taxpayers must issue CFDI (Comprobante Fiscal Digital por Internet) for all transactions. CFDI 4.0 is the current version requiring detailed taxpayer information. Free CFDI generation is available through SAT's portal. Third-party invoicing software provides more features. RESICO taxpayers must issue all invoices as CFDI. Failure to issue CFDI can result in penalties and loss of RESICO eligibility.

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SAT — CFDI: https://www.sat.gob.mx/

8. AFORE and PPR Tax Benefits

Retirement contributions that reduce current tax burden

AFORE voluntary contributions and PPR (Plan Personal de Retiro) contributions are deductible up to 10% of annual income (or 5 UMAs, whichever is lower). At a 30% marginal rate, MXN 50,000 in retirement contributions saves MXN 15,000 in tax. This double benefit (tax reduction + retirement savings) makes pension contributions particularly attractive. AFORE contributions are managed through the chosen AFORE administrator.

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CONSAR — AFORE: https://www.consar.gob.mx/

9. Declaración Anual

Annual tax return filing and key deadlines

Annual income tax returns are filed in April through SAT's DeclaraSAT portal. Monthly provisional payments (pagos provisionales) are due by the 17th of the following month. For RESICO, monthly declarations include income and tax calculation. The annual return reconciles all income, deductions, withholding credits, and final tax. SAT pre-populates much of the return with CFDI data.

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SAT — Declaración Anual: https://www.sat.gob.mx/

10. Compliance Tips

Practical guidance for Mexican gig workers

Tips: evaluate RESICO eligibility (1-2.5% rates are extraordinary); register with SAT and obtain e.firma and CSD for CFDI issuance; issue CFDI for ALL income; make monthly provisional payments on time; maximize AFORE/PPR deductions; claim all eligible personal deductions; and engage a contador for annual filing (MXN 2,000-5,000, deductible). Common mistakes: not issuing CFDI (loss of RESICO eligibility); late monthly payments (recargos/interest charges); not claiming personal deductions on annual return; and exceeding RESICO revenue limits.

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SAT: https://www.sat.gob.mx/

Disclaimer: This guide is for informational purposes only. Tax laws change frequently. Consult a licensed tax professional in Mexico for personalized advice. Links verified as of April 2026.