US Citizens Working in Mexico
See what you actually take home after US and Mexico taxes: whether you're already working abroad or planning a move.
Here's what matters most for US citizens working in Mexico:
- •Mexico has a progressive income tax system with rates up to 35%
- •Cost of living in Mexico is significantly lower than the US, increasing purchasing power
Calculate your take-home pay
See your real take-home pay with currency conversion and cost of living adjustments.
Who taxes you?
As a US citizen working in Mexico, you're subject to taxation by both countries. The US taxes citizens on worldwide income, but the Foreign Earned Income Exclusion (FEIE) can exclude up to $132,900 of foreign earned income in 2026 if you meet the 330-day physical presence test. Mexico taxes its tax residents on all their income, wherever it comes from, with progressive rates. The US-Mexico tax treaty provides foreign tax credits to prevent double taxation.
Common pitfalls
- Mexican tax rates vary by income level and can be complex
- Currency fluctuations between USD and MXN can impact your effective income
- Social security contributions may apply depending on your employment structure
Is there a US-Mexico tax treaty?
Yes. The US-Mexico income tax treaty is in force, and foreign tax credits cover what it does not.
Getting paid in Mexican Peso
Salaries in Mexico City are paid in Mexican Peso (MXN). A 100,000 US-dollar salary is roughly 1,700,000 MXN at current rates. That matters twice over: your US return is always filed in dollars, so the rate on each payday feeds straight into what you report, and a currency that moves against the dollar changes what the same nominal salary is worth to you without your pay changing at all.
Frequently asked questions
Not on the same income: a treaty is in force. You pay the higher of the two rates, not both.
The Mexican Peso (MXN). A 100,000 US-dollar salary is about 1,700,000 MXN at current rates. Your US tax is always calculated in dollars, so the exchange rate on the day you are paid feeds directly into what you report, and into how far the same nominal salary goes in Mexico City.
Mexico has a progressive income tax system. Tax residents are taxed on all their income, wherever it comes from. Tax rates range from 1.92% to 35% depending on income level. You can claim foreign tax credits on your US return to offset taxes paid to Mexico.
Official resources
Primary sources:
Calculate your take-home pay
See your real take-home pay with currency conversion and cost of living adjustments.
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