Mexico

Introduction

Workday provides payroll management services for employers in Mexico. Part of this service will be delivered through Workday’s partner Remote. This document describes the standard product and service offering, the responsibilities of all parties and the country-specific elements required to run payroll for Mexican employees.

Product Scope

This section outlines the standard Payroll features available under Workday GO Global Payroll provided by Remote.

Features

• Payroll processing for salaried and hourly employees (Full time and Part time)
  • Calculation of gross compensation items
  • Calculation of net pay, deduction, and employer contributions
  • Generating and storage of payslips
• Customer employee management (Starters and Leavers)
• Tax and other statutory filings (detailed filings can be found in the services section)
• Ability to add custom payroll calendars and schedules
• Reporting:
  • Gross to Net Report
  • Payroll cost reporting
  • Variance reporting
  • General Ledger summary and detailed reports
• Bank file generation for employee and statutory payments
• Ability to parallel test run payroll outputs Vs historical data to confirm accuracy during deployment

Responsibilities

This section outlines the standard responsibilities for Workday and the customer. These responsibilities apply across all payroll cycles.

Workday responsibilities.

Workday will:

• Provide the platform through which you maintain your employee, compensation, time-related and payroll processing data,
• Facilitate the collection and submission of your employee data and payroll inputs, onboard/offboard your employees for payroll processing,
• onboard/offboard your employees for payroll processing,
• Facilitate payroll and payroll tax transactions following your approval of payroll information for each payroll cycle,
• Calculate your employee payroll and its associated liabilities (including, but not limited to, taxes withheld, expenses, and other payroll related costs),
• Generate, and store payslips to your employees,
• Generate a bank file for payments (as applicable), and
• Provide additional adhoc services requested by you at Workday’s discretion, where such services fall within Workday’s suite of offerings.

Customer responsibilities

As the legal employer, you retain full responsibility for the employment relationship and for ensuring the accuracy of all information used to process payroll. Specifically, you are responsible for:

1. Employment Agreements & Compliance:
   • Owning the employment agreements with your employees and ensuring these agreements comply with applicable law,
   • Ensuring that the data held in the system accurately reflects all employment agreement terms (e.g., compensation, working hours, benefits, job classification).
2. Payroll Data Accuracy & Completeness:
   • Providing accurate, complete, and timely payroll data for each payroll cycle, including your employee details, compensation, time & attendance, benefits, pension information, bank details, and any stationary documents,
   • Validating all payroll-relevant data before each payroll run,
     supplying any information not captured in the system (such as taxable expenses, certain benefits, equity-related items),
   • Supplying any information not captured in the system (such as taxable expenses, certain benefits, equity-related items),
   • Review, approve and finalise payroll information generated,
   • Ensure you complete any payroll returns to tax agencies that were due for payroll tax liabilities incurred prior to using Workday GO Global Payroll provided by Remote,
   • Cancel any other payroll services of professional employee organizations or companies providing payroll-related services for your employees to be paid through Workday GO Global Payroll provided by Remote (cancellation must be prior to any official payroll run by Workday).
3. Workday Deployment & Configuration:
   • Providing complete and correct requirements during implementation,
   • Validating your Workday deployment and ensuring payroll outputs generated by Workday are correct,
     • Updating your Workday configuration as needed to maintain accurate payroll-related data flows.
4. Benefits & Pensions Responsibilities:
   • Managing all your employee benefits (including health insurance and pension schemes) in accordance with local legislative and regulatory requirements,
   • Ensuring all benefit-related earnings, deductions, and taxable/non-taxable benefit valuations are accurately recorded in the system.
5. Payments & Disbursements:
   
   • Using local bank files provided by the service to pay your employees their net pay,
   • Using local bank files provided by the service to pay local authorities payroll taxes and benefit contributions,
   • Coordinating directly with your bank to resolve any issues during the disbursement process.
6. Documentation & Authorisations:
   • Supplying all data and documents necessary to process payroll and statutory filings,
   • Executing agent authorisation for regulatory authorities for Remote to act on your behalf.
7. Employee Communication:
   • Communicating payroll outcomes and related information to your employees (accessible through Workday employee self-service if configured in your account),
   • Understanding that neither Workday nor Remote provides employee-facing support or communicates directly with your employees.

Workday Services Scope

Workday shall provide the following services as part of Workday GO Global Payroll provided by Remote:

Payroll management

Standard Payroll Processing:

• Review and validate payroll input data,
• Calculate payroll, in support of statutory requirements and applicable collective bargaining agreements, and notify affected customers, where applicable,
• Generate payroll reports and provide them to the customer.

Specific for Mexico:

• Medical/Maternity claims processing
• Alimony claims processing
• Affiliatory movement management for social security via IDSE module
• Employee rosters, pre-receipts, CFDI (Digital Tax Invoices)
• PTU handling
• Overtime and public holidays calculation and management
• PTO calculation and management
• PTO premium vacation calculation and management
• Aguinaldo calculation and management
• Infonavit, Fonacot, and SAR quotas
• Social Security Quotas - Verify calculations, issue SUA payment files, and manage affiliatory movements (Altas/Bajas/Modificaciones) including the Bimestral SBC adjustment.
• Calculate the Impuesto Sobre Nómina (ISN) in support of relevant state laws; payment and filing execution, however, are managed directly by the customer.

New Starter Processing:

• Register new hires with local authorities (e.g. tax, public social security system),
• Set up customer employees in the payroll system and provide pro-rated salary calculations based on start date,
• Submit mandatory employment declarations/forms to government portals or agencies,
• Register customer employees for statutory benefits like pension, insurance, and other country-specific schemes,
• Complete all actions on or before payroll approval date.

Specific for Mexico:

• obtain and provide the Constancia de Situación Fiscal (CSF) for every new hire before their first payroll run. Without this document (specifically the exact Regimen Fiscal and Zip Code), it is technically impossible to stamp their payroll (CFDI 4.0), making the payment non-deductible for the employer.
  new hire registration verification with social security authorities (IMSS)

Terminations:

• Process terminations, including final payroll, payslip and calculations for termination and vacation pay,
• De-register customer employees with local authorities.

Specific for Mexico:

• notification/de-registration of terminated employees with the Social Security Authorities (IMSS)

Benefits Processing in Payroll:

• Process payroll benefits, where applicable, based on customer instructions and local compliance, including collective bargaining agreements. Where any such instruction conflicts with legal requirements, the affected customer will be notified, who shall have final decision-making authority, provided that Workday reserves the right to terminate services if customers proceed with non-compliant instructions after notification.
• Note: health benefits enrollment is not included.

Specific for Mexico:

• Aguinaldo (Year-End Bonus): Calculation and processing of Aguinaldo. Employees in Mexico are entitled to a mandatory year-end bonus (Aguinaldo) equivalent to at least 15 days of salary, payable no later than December 20 each year. .
• Vacations and Vacation Premium: Calculation of statutory vacation accruals when applicable and processing of vacation payments and premiums based on employer-provided leave information. Employees accrue statutory vacation days based on their length of service, starting with 12 days after one year, with increases according to seniority brackets. A vacation premium of at least 25% of the regular daily salary must be paid when vacation days are taken.
• Profit Sharing (PTU): Calculation and processing of PTU based on employer-provided financial results, applying the statutory 10% distribution rule and individual entitlement limits. Eligible employees must receive a share of the company’s annual profits (Participación de los Trabajadores en las Utilidades – PTU)
• IMSS Contributions:  Calculation of statutory employer and employee contributions owed to the Mexican Social Security Institute (IMSS), covering mandatory amounts for healthcare, pensions, risk insurance, and other benefits. Generation of the contribution reports and payment files (SUA) for the customer’s direct disbursement, applying all current IMSS rates and salary caps.
• INFONAVIT Contributions: Calculation and reporting of employer contributions to INFONAVIT (Housing Fund), including managing employee loan amortization deductions and discounts. Generation of the payment files (SIPARE/SUA) for customer to execute the final disbursement, adhering to the mandatory 5% base salary contribution.
• Statutory Leave (e.g. Sick, Maternity, Paternity): Processing payroll adjustments related to statutory leave based on IMSS-issued disability certificates (incapacidades) and employer-provided information on salary continuation or top-ups, when applicable.
• Meal and Transportation Vouchers (Vales):, Processing of the corresponding tax treatment and payroll reporting, including ISR exemptions and caps, based strictly on employer instructions in line with Mexican Income Tax Law and fringe benefit regulations, when the employer provides meal or transportation vouchers.
• Retirement Contributions (AFORE): Employee and employer retirement contributions to AFORE (Administradora de Fondos para el Retiro) are calculated and submitted as part of the IMSS monthly payment.

Payment Files:

• provide bank file outputs for salary : generate standard bank file outputs to support the payment of your employee net salaries. These files are provided solely for the customer to execute through their chosen banking institution. Workday does not initiate, authorise, or process any payments.

Specific for Mexico:

• submit filings and provide SIPARE/SAT payment references and reports; the customer makes the actual payments separately to IMSS/INFONAVIT and SAT 

Year-End Activities:

• Submit employer annual wage/tax declarations in support of local authority format and deadlines,
• Distribute employee annual wage/tax declarations (annually).

Specifics for Mexico:

• submit the employer’s annual wage and tax declarations to SAT (Servicio de Administración Tributaria) in line with official formats and deadlines, including reconciliation of payroll-related tax withholdings for the fiscal year.
• process the mandatory Christmas bonus (Aguinaldo), equivalent to at least 15 days of salary, to be paid to employees by December 20th.
• calculate and prepare for the annual Profit Sharing (PTU) distribution, which must be paid to eligible employees by May 30th of the following year, based on the employer’s taxable profit.
• submit the Annual Payroll Tax Declaration (Declaración Anual del Impuesto sobre Nóminas) to state tax authorities, where applicable, based on total taxable payroll.
• complete annual reconciliation of IMSS and INFONAVIT contributions, verifying calculation and payment of social security, retirement (AFORE), and housing fund contributions throughout the year.
• ensure employees can access a summary of earnings and withholdings (Constancia de Retenciones), all salary and tax data is auto-populated in each employee’s SAT account via CFDI reporting.
• support employees in reviewing their tax information, as part of their annual personal tax return (Declaración Anual de Personas Físicas), typically filed by individuals in April of the following year.

Payslips:

• Create and deliver Payslips in the local and English language.

Reporting and analytics

Monthly Payroll Output / Reports

• Standard monthly reports:
  • Gross to net
  • Payslips
  • Salary list
  • Payment list
  • Authorities payments list
• Supplementary payroll run, where available

Recurring statutory filings & submissions:

• Prepare and submit required filings, including tax withholdings, social security, and other statutory contributions monthly, quarterly or annually, in support of local regulations.

Specifics for Mexico:

• DIOT (Third party transactions report)

• Monthly federal tax return (Income Tax WHT, and Payroll WHTs)

• IMSS payments (Social Security contributions) and submission via SUA (Sistema Único de Autodeterminación).

• NFONAVIT payments (Housing Fund contributions) and submission of amortisation/payment files via SIPARE.

• AFORE contributions (Administradoras de Fondos para el Retiro) pension

• ISR payments (Income Tax) reporting (generation of payment lines for the customer’s direct disbursement).

• Payroll receipts (CFDI)

• SESA (Secretaría del Trabajo y Previsión Social) labor-related certifications

• Payroll receipt (Recibo de Nómina)

• INFONAVIT report (Informe de Aportaciones al INFONAVIT)

• AFORE Contributions Report (Reporte de Aportaciones al AFORE)

• Tax filing reports (Declaración Fiscal de la Nómina)

• IMSS and ISR payroll reports (CFDI)

Service and support

Ongoing support:

• Support customers via chat and email with payroll-related questions, including input validation, and timelines.

Assigned contact:

• Dedicated Payroll Customer Success Manager (CSM), for customers with 100 payroll employees or more

Additional payroll services, (subject to additional charge)

Off-cycle payruns:

• Off-cycle simulations & payments, amendments or re-runs,
• First off-cycle payrun per month is included; additional payruns are chargeable.

Customized Reports:

• Tailor standard reports to meet specific business needs - adjusting data type, level of detail, frequency, and format based on system capabilities and limitations.

General Ledger (GL) Customized Report:

• Create a customized General Ledger Report based on the customer's chart of accounts and GL format.

Customized banking files:

• Setup and customisation of monthly bank files based on customer specific requirements and specifications,
• Monthly transmission and delivery of the configured bank files to designated recipients or systems