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Income Tax on Overtime and Minimum Wage in Mexico 2026
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Despite historic increases to the minimum wage, the lack of updates to the income tax brackets has created a "trap" where workers who choose to work overtime end up handing over a disproportionate share of their earnings to the tax authorities. Ruiz Durazo explains that, by law, the minimum wage is protected and no taxes should be withheld. However, the moment a worker earns "even one peso more"—whether for overtime, holidays worked, or bonuses—…
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