SBC Recalculation in Mexico 2026 (Employer Guide)

What Is SBC (Salario Base de Cotización) in Mexico

Salario Base de Cotización, known as SBC, is the salary amount officially registered with IMSS for calculating social security contributions in Mexico. 

It represents the contribution base recognized by IMSS after the employee’s integrated salary has been determined. 

While employers calculate SBC internally, SBC is the figure reported to IMSS and used to generate employer and employee contribution obligations.

• Legal definition of SBC
  SBC is the salary base reported to IMSS under the Social Security Law. It must reflect the employee’s integrated salary as calculated through SBC and be updated whenever integrated compensation changes.
  
  

• Difference between SBC and SBC
  SBC (Salario Diario Integrado) is the internally calculated integrated daily salary that includes base pay and mandatory benefits. SBC (Salario Base de Cotización) is the value reported to IMSS based on SBC and recorded as the official contribution base.
  
  

• Why SBC is critical for payroll compliance
  IMSS calculates social security contributions directly from SBC. Errors result in incorrect quotas, retroactive assessments, fines, and issues affecting employee benefits and social security coverage.
  
  

SBC is the official figure IMSS relies on to enforce compliance. Accurate reporting ensures contributions align with legal requirements and protects employers from audits, penalties, and long-term social security liabilities.

Why SBC Must Be Reviewed in January 2026

January 2026 requires a mandatory review of the Salario Base de Cotización (SBC) for all employers registered with IMSS. However, SBC recalculation applies only to employees whose contribution base is affected by legal changes.

Annual minimum wage update effective January 1, 2026

Minimum wage increases take effect on January 1 each year. When the General Minimum Wage (SMG) changes, it directly impacts employees earning the minimum wage, since IMSS does not allow SBC amounts below the legally established minimum.

For these employees, SBC must be updated effective January 1 to remain compliant.

Employees earning above the minimum wage do not require an SBC update in January, provided their salary and integrated benefits remain unchanged and their SBC continues to exceed the new minimum.

Legal obligation to update payroll bases

Employers are legally required to update SBC whenever a legal change affects an employee’s contribution base. Failure to update SBC when required is treated as underreporting (sub-cotización) and may result in retroactive IMSS adjustments, surcharges, and penalties.

2026 Minimum Wage Rates That Affect SBC

Minimum wage levels are a direct input into SBC compliance because IMSS does not allow contribution bases below the legally established minimum. For 2026, employers must be cautious and apply only officially confirmed rates once published.

• General minimum wage for 2026
  The general minimum wage applicable to most of Mexico took effect on January 1, 2026. At the time of payroll preparation, the exact 2026 rate must be verified against the official publication. Applying unconfirmed or estimated rates creates compliance risk.
  
  

• Northern Border Zone minimum wage for 2026
  Employees working in the Northern Border Zone (MXN $440.87 per day) are subject to a higher minimum wage. This rate is separate from the general minimum wage (MXN $315.04 per day) and must be applied based on the employer’s registered IMSS work location.
  
  

• How wage zones affect SBC calculations
  SBC cannot be reported below the applicable minimum wage for the employee’s zone. Using the wrong zone automatically results in underreported contributions.
  
  

Minimum wage confirmation is critical. Employers should only apply rates once legally published to avoid payroll corrections and IMSS penalties.

When Employers Are Required to Recalculate SBC

SBC recalculation is not limited to January. Mexican payroll law requires employers to update SBC whenever specific employment or legal conditions change. Failure to recalculate on time is treated as underreporting to IMSS.

• Minimum wage increases
  When the minimum wage increases, Salario Base de Cotización (SBC) must be reviewed immediately. If an employee’s integrated salary falls below the new minimum, the contribution base must be adjusted to meet the legal floor.
  
  

• Salary adjustments
  Any increase or decrease in fixed salary requires an SBC recalculation. Changes must be reflected starting from the effective date of the salary modification, not retroactively or at payroll convenience.
  
  

• Changes in statutory benefits
  Adjustments to mandatory benefits such as vacation days, vacation premium, or Christmas bonus require SBC updates. These changes affect the integration factor used for social security contributions.
  
  

• Changes in employee seniority
  As employee seniority increases, statutory benefits increase by law. When benefit thresholds change, SBC must be recalculated to reflect the new integrated value.
  
  

SBC recalculation is an ongoing obligation. Employers must monitor changes continuously to remain compliant with IMSS requirements.

Components Included in SBC Calculation

SBC is not limited to base salary. Mexican law requires employers to integrate specific statutory benefits into the contribution base used for IMSS, INFONAVIT, and SAR. Omitting any required component results in underreported contributions.

• Base daily salary
  The base daily salary is calculated by dividing the monthly salary by 30. This amount forms the starting point of the Salario Base de Cotización (SBC) and must reflect the employee’s fixed contractual salary, not estimated, averaged, or discretionary figures.
  
  

• Aguinaldo (Christmas bonus)
  Aguinaldo is a mandatory benefit and must always be integrated into SBC. The law requires a minimum number of days per year, and this value is prorated over 365 days to determine its daily impact on the integration factor.
  
  

• Vacation days
  Statutory vacation entitlement increases with seniority. Vacation days themselves are not directly integrated into SBC, as they represent paid rest time. However, the number of vacation days is used as the basis to calculate the vacation bonus that integrates into the salary.
  
  

• Vacation bonus
  The vacation bonus is mandatory and calculated as a percentage of vacation pay. Only the vacation bonus integrates into SBC, and it is incorporated on a prorated annual basis, using the employee’s statutory vacation entitlement and applicable vacation bonus percentage.
  
  

Other legally integrated benefits (for IMSS purposes)

Under the Mexican Social Security Law (LSS), any payment or benefit granted to an employee in exchange for their work must be reviewed to determine whether it integrates into the Salario Base de Cotización (SBC).

As a general rule, benefits that are paid regularly or form part of guaranteed compensation integrate into SBC, unless the law expressly allows their exclusion and all legal requirements are met.

Only benefits specifically excluded under Article 27 of the LSS may be excluded from SBC. When exclusion conditions are not met, the benefit must be integrated.

SBC must accurately reflect the statutory cost of employment for social security purposes. Improper integration or exclusions may result in IMSS recalculations and penalties.

Items Excluded From SBC

Not all payments made to employees are included in SBC (Salario Base de Cotización). Mexican law allows certain concepts to be excluded from the IMSS contribution base, only when they meet strict legal criteria established in the Ley del Seguro Social. Incorrect exclusions are a common audit issue.

• Non-statutory benefits
  Benefits that are not required by law and are granted voluntarily may be excluded from SBC, provided they are not paid regularly as guaranteed compensation, and meet the exclusion requirements under Article 27 of the LSS. If a voluntary benefit becomes recurring or contractual, it may lose its exclusion status.
  
  

• Reimbursements and expense payments
  True expense reimbursements that compensate employees for business-related costs are excluded from SBC, as long as they are not remuneration for work performed. These payments must be supported by proper documentation and must not represent disguised salary. Unsupported reimbursements are frequently reclassified during audits.
  
  

• Non-integrable perks
  Certain perks may be excluded when they meet legal exemption requirements and are not tied to performance or attendance. These exclusions must be applied cautiously and consistently.
  
  

Exclusions must have clear legal justification. When IMSS identifies improperly excluded items, SBC is recalculated retroactively, increasing contributions, surcharges, and penalties.

Factor of Integration and Its Role in SBC

The factor of integration is the multiplier used to convert base daily salary into SBC (Salario Base de Cotización). It reflects the value of mandatory benefits integrated into the IMSS contribution base and is essential for correct social security reporting.

• Definition of factor of integration
  The factor of integration is the ratio between statutory benefits that integrate for social security purposes and the days in a year. It combines base salary, vacation bonus, and Christmas bonus into a single value used to calculate SBC. Vacation days do not integrate directly and are used only to calculate the vacation bonus.
  
  

• How seniority affects the factor
  As employee seniority increases, statutory vacation days increase by law. This affects the calculation of the vacation bonus, which increases the value of integrated benefits and results in a higher SBC integration factor. Payroll systems must update the factor when seniority thresholds are reached.
  
  

• Common integration factors used in payroll
  Employers often use standard integration factors based on benefit minimums and seniority levels. Using outdated factors or applying a single factor to all employees is a frequent audit error.
  
  

Accurate integration factors ensure SBC reflects legal benefit entitlements. Incorrect factors lead directly to underreported contributions and IMSS recalculations.

How to Recalculate SBC Step by Step for January 2026

January 2026 SBC recalculation must be handled as a controlled payroll update. Employers should follow a clear step process to ensure IMSS reporting reflects the correct SBC (Salario Base de Cotización) from the first payroll of the year.

• Identify updated daily salary
  Confirm each employee’s current monthly salary and convert it to daily salary using a 30-day divisor. If salaries were adjusted due to minimum wage (SMG) changes, apply the updated salary starting January 1, 2026.
  
  

• Apply correct factor of integration
  Determine the correct integration factor based on the employee’s statutory benefits and seniority level. Confirm that Aguinaldo days and the vacation bonus (prima vacacional) used in the factor align with legal minimums and the employment agreement. Vacation days are used only as the basis to calculate the vacation bonus and do not integrate directly.
  
  

• Calculate the new SBC
  Multiply the daily salary by the integration factor to determine SBC. If the employee has recurring integrated variable income that integrates for social security purposes, add the daily integrated amount as required by policy and payroll design.
  
  

• Validate against minimum legal thresholds
  Confirm SBC is not below the applicable minimum wage for the employee’s wage zone. If it falls below, adjust to the legal floor before reporting to IMSS. Also, verify whether the employee is subject to the maximum SBC cap of 25 UMA per day and adjust accordingly when applicable.
  
  

SBC recalculation must be documented and applied consistently. Errors in January often impact the entire year of social security reporting.

Practical SBC Recalculation Example for 2026

These examples show how the 2026 minimum wage rates affect SBC reporting. They assume minimum statutory benefits and a standard integration factor based on 15 days Aguinaldo, 12 vacation days, and a 25 percent vacation premium. Actual factors vary by seniority and contractual benefits.

• Example using general minimum wage
  An employee earns the general minimum wage of MXN $315.04 per day. Using an example integration factor of 1.0493, the SBC is:
  MXN 315.04 × 1.0493 = MXN 330.57 SBC
  This SBC is the base for IMSS, INFONAVIT, and SAR contributions, not the daily salary.
  
  

• Example using border zone minimum wage
  An employee works in ZLFN and earns MXN $440.87 per day. Using the same example integration factor of 1.0493, the SBC is:
  MXN 440.87 × 1.0493 = MXN 462.59 SBC
  
  

These examples show why wage zone accuracy matters. A zone error impacts SBC, contributions, and audit risk from the first payroll of January.

Impact of SBC Recalculation on IMSS Contributions

SBC recalculation directly affects how IMSS contributions are calculated and paid. Because IMSS contributions are based on the integrated salary, even small SBC changes can materially impact monthly payroll costs and compliance exposure.

• Employer contributions
  Employer IMSS contributions are calculated using SBC and vary by risk class and benefit category. When SBC increases due to minimum wage updates or benefit changes, employer contributions increase proportionally. Failure to update SBC results in underpaid contributions, which IMSS later recalculates with surcharges and interest.
  
  

• Employee contributions
  Employee social security contributions are also calculated using SBC and withheld through payroll. If SBC is incorrect, employee deductions may be under-withheld or over-withheld. Employers remain responsible for correcting these differences, even when the error impacts employee net pay.
  
  

• Risk of under- or over-reporting
  Underreported SBC creates audit exposure and retroactive liabilities. Overreporting inflates costs and may cause employee disputes. IMSS reviews SBC accuracy through cross-checks with payroll CFDIs and contribution filings.
  
  

Accurate SBC recalculation protects both employer and employee interests. January errors often affect the entire contribution year and are difficult to reverse once reported.

Impact on INFONAVIT and Other Social Contributions

SBC recalculation does not affect IMSS alone. INFONAVIT and other linked social contributions rely on the same integrated salary base. Errors in SBC flow directly into housing fund obligations and employee credit calculations.

• INFONAVIT contribution base
  INFONAVIT employer contributions are calculated using the SBC reported to IMSS. When SBC increases in January, the contribution base for housing fund payments increases automatically. If SBC is not updated, INFONAVIT contributions are underreported, creating differences that are later assessed with surcharges and penalties.
  
  

• Effect on housing credits and payments
  For employees with active INFONAVIT housing credits, SBC determines the withholding amount applied to loan repayments. An incorrect SBC results in incorrect deductions. Underreporting delays loan repayment and exposes the employer to collection claims. Overreporting increases employee deductions and often leads to disputes.
  
  

INFONAVIT cross-checks SBC data against IMSS filings. Discrepancies are identified electronically and corrected retroactively. SBC recalculation in January ensures housing contributions and credit payments remain accurate and compliant throughout the year.

Correct SBC protects employers from INFONAVIT assessments and ensures employee housing obligations are calculated fairly and lawfully.

Impact of SBC on Termination and Severance Payments

SBC plays a critical role in termination-related payments under Mexican labor law (LFT). Errors in SBC calculation directly affect severance exposure and final settlement amounts during employee termination.

• Finiquito calculations
  Finiquito includes accrued salary, proportional Aguinaldo, unused vacation days, and vacation bonus. These amounts are calculated using daily salary and the integrated salary (SDI) as defined under the Federal Labor Law. An incorrect SBC often leads to underpayment or overpayment during termination, increasing legal risk.
  
  

• Indemnification and severance bases
  Statutory severance, including the 90-day indemnification and the seniority premium, is calculated using the integrated salary base (SDI) in accordance with Articles 84 and 89 of the Federal Labor Law, subject to applicable legal caps.
  
  

If SDI has been underreported during employment, labor authorities or courts may recalculate severance amounts using the correct integrated salary, creating unexpected liabilities at the time of termination.

Termination reviews frequently uncover SDI errors that were not detected during active employment. Once identified, employers may be required to correct termination payments and related labor settlements.

Accurate SDI throughout employment reduces severance disputes, financial exposure, and post-termination labor risk.

Common SDI and SBC Recalculation Errors Employers Make

Recalculation errors usually occur at the beginning of the year when payroll updates are rushed or handled without full review.

While SDI errors affect labor-related calculations, IMSS treats errors related to the Salario Base de Cotización (SBC) as contribution underreporting rather than administrative mistakes.

• Using outdated minimum wage figures
  Employers sometimes continue using prior year minimum wage rates in January payroll. This immediately places SBC below the legal threshold for minimum-wage employees. and creates underreported contributions from the first payroll of the year.
  
  

• Incorrect factor of integration
  Applying a generic integration factor to all employees ignores differences in seniority and statutory benefits. Using outdated factors or incorrect benefit assumptions results in inaccurate integration values, which may affect SBC reporting for IMSS purposes and SDI for labor calculations.
  
  

• Omitting mandatory benefits
  Failing to integrate Aguinaldo, vacation days, or vacation bonux into SBC is a common error. These benefits are mandatory and must be included when calculating the integrated salary (SDI) and, when applicable, the SBC reported to IMSS.
  
  

• Payroll system not updated
  Payroll systems that are not updated for new wages, benefits, or factors generate incorrect SBC and SDI values automatically. Manual corrections after reporting rarely eliminate audit exposure.
  
  

Confusing SDI with SBC (a common and costly mistake)

Many employers assume SDI and SBC are the same, but they serve different legal purposes and should never be used interchangeably. This confusion is one of the most common causes of payroll, IMSS, and termination errors in Mexico.

• SDI (Salario Diario Integrado) is a labor-law concept used to calculate termination payments and indemnifications under the Federal Labor Law (LFT). It reflects the employee’s fully integrated salary, including mandatory benefits. SDI has no legal maximum cap, so it may be higher than the salary reported to IMSS.
  
  

• SBC (Salario Base de Cotización) is the social security concept used by IMSS to calculate employer and employee contributions. Although it is based on integration principles similar to SDI, SBC is subject to a legal maximum cap of 25 UMA per day, which is updated annually. IMSS contributions cannot exceed this cap, even if the employee earns more.
  
  

Because of this difference, the SDI used for severance and termination calculations is often higher than the SBC reported to IMSS. Confusing the two can lead to underpaid severance, incorrect IMSS reporting, or both, creating significant legal and financial risk.

IMSS Audit Risks Related to Incorrect SBC

IMSS actively audits SBC accuracy because it determines the correct level of social security funding. Incorrect SBC creates immediate audit risk and financial exposure.

• Sub-cotización risks
  Reporting SBC below the legally required level is considered sub-cotización. IMSS treats this as underreporting, even when unintentional, and recalculates contributions retroactively.
  
  

• Penalties and surcharges
  IMSS applies fines, surcharges, and interest on unpaid contributions. These amounts accrue from the original due date, significantly increasing total liability.
  
  

• Back payments and adjustments
  Once incorrect SBC is identified, IMSS reassesses prior periods and issues payment demands for contribution differences. Employers must pay the adjusted amounts to remain compliant.
  
  

Incorrect SBC often triggers broader payroll reviews. Audit findings frequently extend beyond SBC to include benefits, wages, and payroll reporting practices.

Why Foreign Companies Rely on Human Resources Mexico (HRM)

Foreign companies rely on Human Resources Mexico (HRM) because SBC recalculation and social security compliance require a real legal employer operating inside Mexico.

HRM acts as the sole legal employer, ensuring SBC is correctly calculated, updated, and reported for IMSS social security purposes, and SDI is correctly calculated and applied for termination and indemnification purposes under the Federal Labor Law, without ambiguity or risk transfer.

• HRM as the legal employer in Mexico
  HRM is a REPSE-registered Employer of Record with long-standing physical operations in Mexico. Employees are legally hired by HRM, which places full responsibility for payroll, SBC reporting, and social security compliance on a single Mexican employer. This structure eliminates co-employment risk and audit uncertainty.
  
  

• SBC recalculation handled correctly and on time
  HRM recalculates SBC immediately when minimum wages, salaries, or statutory benefits change. January recalculations are applied from the first payroll of the year and reported correctly to IMSS. This prevents sub-cotización findings and retroactive adjustments.
  
  

• Full IMSS, INFONAVIT, and payroll compliance coverage
  HRM manages IMSS, INFONAVIT, and payroll reporting using Mexican compliance logic. Contribution bases, filings, reconciliations, and documentation are handled locally, ensuring audit readiness at all times.
  
  

Foreign companies entering Mexico face immediate social security exposure. HRM provides legal certainty, correct payroll execution, and continuous compliance without requiring a local entity.

Want to hire in Mexico and stay compliant?
Reach out to us and get a custom proposal for your hiring needs.

FAQs

When must SBC be recalculated in Mexico?

SBC (Salario Base de Cotización) must be recalculated whenever minimum wages change, salaries are adjusted, statutory benefits increase, or employee seniority affects benefits. January recalculation is mandatory due to annual minimum wage updates. but recalculation applies only to employees whose SBC is affected by the change. Delaying required SBC updates creates IMSS underreporting and audit exposure.

Does SBC recalculation apply to all employees?

No. SBC recalculation does not automatically apply to all employees. It applies only when an employee’s IMSS contribution base is affected by minimum wage increases, salary changes, benefit integration changes, or legal caps. Employees earning above the minimum wage do not require an SBC update in January if their salary and integrated benefits remain unchanged and their SBC continues to exceed the legal minimum.

What happens if SBC is not updated in January?

If SBC is not updated when legally required, IMSS treats the difference as sub-cotización. Authorities may recalculate contributions retroactively and apply surcharges and interest. Corrections made later do not eliminate penalties for the affected periods.

Does SBC affect INFONAVIT and termination payments?

Yes. INFONAVIT contributions and housing credit withholdings are calculated using SBC, as it is the contribution base reported to IMSS. Termination and severance payments, however, are calculated using SDI (integrated salary) under the Federal Labor Law, not SBC. Confusing these concepts may result in incorrect IMSS reporting or inaccurate termination payments.

How does using an EOR help with SBC compliance?

A compliant Employer of Record manages SBC recalculation and IMSS reporting, while also ensuring SDI is correctly calculated for termination and indemnification purposes under labor law. This dual approach ensures contribution bases and termination payments are handled correctly, reducing audit risk for foreign companies hiring in Mexico.