Does Mexico use progressive tax brackets?

Yes, Mexico uses a progressive income tax system where higher portions of income are taxed at higher rates. This means the more you earn, the higher percentage you'll pay on those top earnings, but your effective (average) rate will always be lower than the highest bracket you hit. Mexico's income tax rates range from 1.92% on the lowest incomes up to a top marginal rate of 35.0% for income over approximately $208,000 USD (based on the 2024 UMA conversion). For example, if you earn $50,000 USD, you won't pay 35% on that entire amount. Instead, different portions of your income will fall into lower brackets, like 10.88% or 17.92%, before any higher rates apply. This progressive structure is designed to tax higher earners proportionally more. Understanding these brackets is key for anyone planning to work or live in Mexico, as it directly impacts your take-home pay.