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Profit sharing is mandatory: employees get 10 percent of taxable income

Last verified: 2026-10-27 · Status: Stable

Abroad, profit sharing is a voluntary bonus plan; in Mexico it is a constitutional right, and employees share in 10 percent of the employer's taxable income each year. The pool is paid within 60 days after the annual tax return is due (by 30 May for companies), half by days worked and half by salary, with each worker capped at the higher of three months of salary or the three year average. Directors and general managers are excluded, new companies are exempt in their first year, and workers can object to the employer's tax return.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Mexican law uses the Banxico FIX rate published in the DOF for foreign currency amounts, which differs slightly. Conversions are for orientation only.

Key facts

Mandatory employee profit sharing (PTU), share of taxable income	10 %LFT art. 117; Sixth National Commission resolution, DOF 18 September 2020, as of 2026-10-27 · in force
Per worker profit sharing cap: higher of three months of salary or three year average	3 months of salaryLFT art. 127, section VIII, as of 2026-10-27 · in force
Payment deadline after the annual tax return due date	60 daysLFT art. 122, as of 2026-10-27 · in force
Businesses exempt from PTU when annual declared income does not exceed	300000 MXNSTPS resolution DOF 19 December 1996 (LFT art. 126, section VI), as of 2026-10-27 · in force
Minimum days worked for temporary workers to share in profits	60 daysLFT art. 127, section VII, as of 2026-10-27 · in force

The rule

1. Workers share in the profits of the company at the percentage set by the National Commission for Employee Profit Sharing. The Sixth Commission's resolution, published in the DOF on 18 September 2020, fixes it at 10 percent, applied to taxable income (renta gravable) determined under the income tax law. Contract clauses that set a fixed amount are valid only if the worker gets at least the legal share.
Cost to do it: 10 percent of taxable income, paid in cash.
Example: A subsidiary with 2026 taxable income of MXN 10,000,000 owes a pool of MXN 1,000,000. / About USD 53,580 on taxable income of about USD 535,797.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026); Resolution of the Sixth National Commission for Employee Profit Sharing, DOF 18 September 2020, as cited by SAT, LFT arts. 117 and 120; Sixth Commission resolution, first resolutive point, 2020-09-18 official text · verified 2026-10-27

2. The pool must be paid within 60 days after the date the annual income tax return is due, even if workers have objected. Companies file within three months after the 31 December year end, so SAT's 2026 manual sets 30 May 2026 for companies (29 June for individual employers). Within ten days of filing its return, the employer must give workers a copy; workers may object. Unclaimed amounts are added to the next year's pool, and a worker's claim lapses one year after the payment date.
Cost to do it: No fee; late payment exposes the employer to labor inspections and claims.
Example: For the 2026 fiscal year a company files its return by 31 March 2027 and pays PTU within the following 60 days, by 30 May 2027. / No US dollar effect.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026); SAT, Manual laboral fiscal de participación de utilidades 2026, LFT arts. 121, 122 and 516, 1976-07-02 official text · verified 2026-10-27 · changed: Art. 122 was last restated by the DOF 2 July 1976 reform.

3. The pool is split into two equal halves: the first is shared equally among all workers by the number of days each worked in the year, regardless of salary; the second in proportion to salaries earned. Directors, administrators and general managers do not participate. Other confidential staff participate, but with a salary capped at the highest paid unionized or permanent worker's salary plus 20 percent. Household workers do not participate and temporary workers participate if they worked at least 60 days. Each worker's share is capped at the higher of three months of that worker's salary or the average share received in the last three years.
Cost to do it: No extra cost; the cap can reduce the pool actually paid.
Example: A worker on MXN 15,000 a month whose formula share is MXN 60,000, with a three year average of MXN 30,000, receives MXN 45,000 (three months of salary, the more favorable cap). / About USD 2,411 instead of USD 3,215.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Arts. 123 and 127, sections I, II, VI, VII and VIII, 2021-04-23 official text · verified 2026-10-27 · changed: The DOF 23 April 2021 outsourcing reform added the per worker cap in section VIII; the DOF 24 December 2024 reform restated it and added platform workers (section IX).

4. Exempt from profit sharing: new companies in their first year of operation; new companies making a new product in their first two years; new extractive companies during exploration; private charitable institutions; IMSS and certain public bodies; and businesses with capital below the amount set by the Ministry of Labor. SAT cites the STPS resolution of DOF 19 December 1996 exempting businesses whose annual declared income does not exceed MXN 300,000. Losses of earlier years are not offset against profits for this purpose.
Cost to do it: No fee.
Example: A subsidiary registered with SAT in March 2026 is exempt during its first year of operation, which under the labor authority criterion cited by SAT runs from its tax registration date; profits of later periods are shared. / The MXN 300,000 income threshold is about USD 16,074.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026); STPS resolution under LFT art. 126, section VI, DOF 19 December 1996, as cited by SAT, LFT arts. 126 and 128, 1970-04-01 official text · verified 2026-10-27

Taxable income (MXN)	PTU pool (MXN)	PTU pool (USD)
1,000,000	100,000	5,358
10,000,000	1,000,000	53,580
50,000,000	5,000,000	267,898
100,000,000	10,000,000	535,797

PTU pool by taxable income (10 percent), before per worker caps. USD at MXN 18.6638. Source: LFT art. 117 and Sixth Commission resolution.

Worked example

A Mexican subsidiary has 2026 taxable income of MXN 10,000,000 and 100 workers.
The pool is MXN 1,000,000 (USD 53,580). Half (MXN 500,000) is shared by days worked and half by salary, then each worker's share is capped at the higher of three months of salary or the three year average.
The general manager receives nothing; a plant manager who is confidential staff participates with a capped salary.
Payment is due by 30 May 2027, after the 2026 return is filed by 31 March 2027.

Step by step

1. Accrue 10 percent of estimated taxable income monthly as a PTU liability.
2. File the annual return by 31 March and give workers a copy within ten days (art. 121).
3. Form the joint workers and employer committee that prepares the distribution list (art. 125).
4. Compute shares: half by days worked, half by salary, cap confidential staff salaries, exclude directors and general managers, then apply the per worker cap (arts. 123 and 127).
5. Pay by 30 May (companies) and keep signed receipts; carry unclaimed amounts into next year's pool (art. 122).

Common traps

PTU is computed on taxable income, so adjustments that increase taxable income after an SAT audit trigger an additional distribution within 60 days of the ruling (art. 122).
Tax exemptions do not exempt PTU: SAT's manual states that companies partly or wholly exempt from income tax still share profits.
Losses of prior years cannot be offset against PTU profits (art. 128).
A clause promising a fixed bonus 'in lieu of PTU' is valid only if it pays at least the legal share.
The first year exemption runs from the date of tax registration under the labor authority criterion cited by SAT, not from the start of sales.

Sources

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