Starting Your First Formal Job: Understanding Fiscal Obligations
Securing your first formal job is an exciting milestone for any young professional. However, it comes with certain fiscal responsibilities to ensure proper tax withholdings and access to legal employment benefits. These obligations begin with registering in the Registro Federal de Contribuyentes (RFC), a necessary step for those embarking on their formal working life.
RFC Registration and SAT Requirements
Virginia Ríos, a member of the Tax Research Investigation Technical Commission at the Mexican Institute of Certified Public Accountants, emphasizes that registering in the RFC is the first mandatory step when integrating into the formal sector. Typically, when starting your first job—even while still studying—you usually register under the salaried regime, establishing an employer-employee relationship.
Paulina Casso, author of “WTF with the SAT,” highlights the importance of identifying the correct tax regime. For instance, those working through delivery platforms, providing independent professional services, or receiving income from rentals must choose the appropriate regime to fulfill their obligations correctly.
According to the Tax Administration Service (SAT), to register in the RFC, you need a valid official ID, updated birth certificate, CURP, current email address, and a USB drive for e-signature processing. This procedure is personal and free.
Annual Declaration and Personal Deductions
Once registered in the RFC, your employer is responsible for enrolling you and withholding the appropriate Income Tax (ISR), as well as contributions to the pension account and Infonavit. This ensures access to legal entitlements like Seguro Social medical services, vacations, and Christmas bonuses.
Fiscal obligations and benefits largely depend on annual income and the tax regime. You must file an annual declaration if you earn more than 400,000 pesos annually, have more than one employer, receive a severance package or labor compensation, or earn additional income alongside your salary, such as rental income, fees, or business activities.
Your employer is responsible for withholding and remitting the correct ISR on your salary; however, if you have additional income, you must calculate and pay the tax in your annual declaration.
Even if not mandatory, filing allows access to personal deductions like medical, funeral expenses, donations, or pension fund contributions. To validate these deductions, payments must be made via electronic transfer and have an electronic invoice. You can deduct up to 5 UMAs annually or 15% of your income, whichever is less.
Recommendations to Prevent Tax Abuses and Fraud
To maintain a responsible fiscal life, verify the tax regime under which your employer registers you with the SAT and ensure the reported salary accurately reflects your earnings. Avoid accepting cash payments that omit legal entitlements or irregular tax registrations.
Experts remind us that both SAT registration and employer-side enrollment are free procedures. Do not accept unwarranted charges for these services and always review your employment status and the tax receipts you receive.
8 Common Mistakes Young Professionals Make in Their First Job
Knowledge is power, enabling better decisions. Here are common mistakes young professionals often make in their first job:
- 1. Many young adults start their working life without registering with the SAT, preventing them from fulfilling fiscal obligations and accessing legal benefits later.
- 2. Employers often register employees under a regime different from salaried (e.g., as independent contractors), which may affect their access to entitlements and social security.
- 3. Some young adults fail to verify the correct issuance of pay stubs, leading to fiscal history inconsistencies and potential issues with the SAT.
- 4. Lack of understanding about when salaried employees must file annual declarations can result in penalties or loss of deduction or refund rights.
- 5. Some employers offer part of the salary without official registration to evade obligations, affecting the employee’s entitlements, credit history, and retirement savings.
- 6. There are cases where managers charge for SAT registration or employer enrollment, although both are free.
- 7. Failing to take advantage of deducting medical, educational, or pension fund expenses by not requesting electronic invoices limits access to tax refunds.
- 8. Not informing oneself about legal entitlements (social security, vacations, Christmas bonus) leaves one vulnerable to employer abuses or non-compliance.
