cargos sociales Social Security Taxes / Social Security Contributions

Creator:	Richard Cadena
Language pair:	Spanish to English
Discipline:	-
Definition / notes:	Cargas Sociales are social security taxes or benefits paid by employers. In Mexico, this means that employers and employees pay contributions or taxes to social security entities of which there are three: El Instituto Mexicano del Seguro Social (IMSS) INFONAVIT (Instituto del Fondo Nacinal de la Vivienda para los Trabajadores SAR (Sistema de Ahorro para el Retiro) This is a heavy tax burden for the averge company in Mexico. When a company hires someone and puts him or her on the payroll, the employer has to register the new employee with Social Security. The employer also has to give notice of when the employer/employee relationship terminates, and the employer also has to give notice of any changes in salary or wages. This means salary raises most of the time. The Instituto Mexicano del Seguro Social is also a nationwide hospital and clinic network that provides health care in general, and also includes a retirement pension. US Social Security does not include health care, but rather only retirement benefits. All of this is what "cargos sociales" refers to. Social Security authorities in Mexico are very tough and an audit by them is absolute murder. Individuals also have to be careful if they only have one company that provides their only source of income. I have recently had to sign a contract with PricewaterhouseCoopers and Grant Thornton Mexico, which set forth that even though I billed them on a regular basis as an individual. I also had to furnish documents that I had other clientele and that neither of those firms was my sole employer, even though it was a type of outsourcing and I am formally not on the payroll. However, the IMSS can attempt to claim that there is an employer-employee relationship and that these firms had to fight off claims that there was such an employer-employee relationship and was, therefore, subject to social security contributions, surcharges, penalties, and restatements.
URL:	http://aicpa.org