- Country Information
- Mexico
How is expense being handled in Meixco?
General
Expenses and reimbursement in Mexico are typically handled according to the company's policies and procedures. This may involve employees submitting expense reports for approval, providing receipts for all expenses incurred, and adhering to specific guidelines for what can be reimbursed. The tax regulations in Mexico may also impact how expenses are handled, so it is essential for both employees and employers to stay informed about any relevant laws or changes that could affect reimbursement processes.
As an EOR provider, Horizons understands the importance of having clear and concise instruction in place for employee business expenses. While we do not develop a specific policy ourselves, we work closely with our clients to ensure that they are informed of the regulations to avoid unnecessary additional cost burden to the Client.
The purpose of this information is to facilitate clients and their team members in comprehending the impact of the Mexican tax and accounting on the expense process for employees. Please review the following details.
Expense Timeline
Expense Claiming and approval
Due to the local accounting system in Mexico, invoices issued within a given month must be accounted for within the same calendar month. Consequently, it is imperative that employee expense are submitted and approved prior to the designated cut-off date of 5th following months.
E.g. The invoice is dated 2024/7/25 and should be submitted and approved as expense on Horizons Portal by 2024/8/5.
Reimbursement
The reimbursements on approved expense will be made in the same month of the payroll cycle.
E.g. The expense approved before 2024/8/5,will be reimbursed in the 2nd pay run of August 2024.
Payment Method
- I. Invoices exceeding $2,000.00 MXP should not be paid in cash but through a credit/debit card.
- II. In the case of fuel payment, it must always be paid with a card, regardless of the amount of the invoice/purchase.
- III. If expenses were paid with a credit or debit card, employees must submit the voucher.
Tax Deductibility
Please refer to the instruction of Expense requirement for tax deduction as attached.
All Invoices for business expense must be issued to Horizons GT Mexico S. de R.L. de C.V. as buyer but not the employee themselves including but not limited to phone bills, and insurance etc.
Note: If the approved expense does not meet the requirements, it will be grossed up by 30%-40% as income on the employer's payroll, resulting in an increased employer burden as well
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