Profit Sharing (PTU): Learn How It's Calculated and Distributed

Profit Sharing (PTU): Learn How It's Calculated and Distributed

Employees' Statutory Profit Sharing (PTU) is a constitutional right enshrined in article 123, section A, of the Political Constitution of the United Mexican States (CPEUM). Pursuant to this provision, workers are entitled to receive a portion of the profits generated by the company or employer derived from their productive activity or rendering of services.

Amount to be distributed

Pursuant to Article 117 of the Federal Labor Law, the workers' profit sharing percentage is 10% of the taxable income determined in the annual tax return for the corresponding year. This amount constitutes the basis for the calculation and distribution among the employees entitled to receive the benefits as established in such law.

Companies that must grant profits

• All economic units engaged in the production or distribution of goods or services in accordance with the Federal Labor Law and individuals or legal entities that have workers in their service.

• Newly created companies, private assistance institutions, public institutions and companies with capital less than that established by the Ministry of Labor and Social Welfare are excluded.

Employees entitled to profit sharing

• Temporary employees who have completed at least a period of 60 days during the year.

• Employees in positions of trust, who are entitled to a profit sharing of 20% in addition to the maximum salary of a unionized or base worker.

Workers who are NOT entitled to profit sharing

• Domestic workers.

• Temporary workers who have worked less than 60 days in the company.

• Directors, administrators, general managers, partners or shareholders of the company.

• Technical professionals who render their services through the payment of fees without a subordinate work relationship.

Calculation of the distribution

It is divided into two equal parts:

• First part: days worked are considered.

• Second part: it is distributed proportionally to the salaries of each worker during the year.

Payment limit for labor reform

Article 127 section VIII LFT. The amount of profit sharing will have a maximum limit of three months of the employee's salary or the average of the profit sharing received in the last three years; the amount that is more favorable to the employee will be applied.

Date of payment

Profit sharing must be made within the first 60 days after the date of the company's annual tax return or tax payment.

The date depends on whether you are an individual or a legal entity:

• Companies: between April 1 and May 30.

• Individuals: from May 1 to June 29.

Fines for Non-Compliance

The Federal Labor Law establishes fines from 250 to 5,000 Units of Measurement and Actualization (UMA), which is equivalent to 28,285.00 to 565,700.00 pesos for failure to pay utilities in due time and form.

Tax benefits of timely payment of employee profit sharing

• Total deduction of the expense

• PTU is deductible from income tax for tax purposes, as long as it is paid in accordance with the law (within the legal deadline). This helps to reduce the taxable income tax base for the year.

• You avoid surcharges and fines from the SAT

• If you do not pay the PTU on time, the SAT can impose fines and surcharges, which increases the total cost of compliance. Paying on time avoids these unnecessary expenses.

• Compliance with tax audits

• Paying PTU on time demonstrates compliance with SAT audits or reviews, reducing the risk of observations or tax adjustments.

• Avoid accumulation in subsequent years

• If you do not pay PTU in the corresponding fiscal year, you cannot deduct it in subsequent years, which affects your tax planning and your financial results.

• Avoid labor conflicts with tax repercussions

• Failure to comply with the payment may result in labor complaints, which could lead to tax reviews, penalties and loss of tax benefits.

Next steps

If your company or as an individual you obtained a profit for fiscal year 2024, the BPO Payroll and Social Security area will be making the calculation to be distributed in the next few days.

The report with the amounts to be paid will be calculated and sent in the course of the next few days having the calculation before the first week of May for legal entities; and the first week of June for individuals.

If you have any questions, please contact our BPO area with our manager Lic. Anayin Pineda AnayinP@ascg.mx Cel. 55 2070 3609