Profit Sharing (PTU) in Mexico: Calculation and Deadlines

Every year, between March and June, a foreign company with a Mexican payroll faces the same task: calculate profit sharing from the annual tax return, apply the cap the 2021 reform introduced, and pay within the deadline before a labor claim starts accruing. An error in the base or the cap exposes the employer to Mexico's Labor Secretariat and to employee claims, which stay open for a year.

In Soulbit Academy we cover profit sharing from the employer's side. This guide explains which entities owe PTU, the taxable income that serves as its base, how the 10% splits between days worked and wages earned, the cap the 2021 reform set, who is excluded, when the deadline falls, and how income tax withholding applies to what each employee receives.

What profit sharing is and which employers owe it in Mexico

Profit sharing is the payment of 10% of a Mexican employer's taxable income for the year, owed to every subordinate employee. This right is set out in Article 123, Section A, Fraction IX of the Constitution and developed in Articles 117 through 131 of Chapter VIII of the Federal Labor Law, covering the calculation base, the deadline, and penalties for non-compliance.

The obligation only applies to a Mexican legal entity, corporation or individual with business activity, that has positive taxable income and subordinate employees under the LFT. A foreign company that pays Mexican-based independent contractors directly from abroad, with no local entity and no employment relationship, owes no PTU on those payments, because PTU is tied to subordinate employment, not to services billed by a contractor. The law also exempts newly created companies during their first year, companies launching a new product during their first two years, and nonprofit charitable institutions.

Does a foreign company with only contractors in Mexico owe profit sharing?

No. PTU only applies where a Mexican employer, corporation or individual, has employees under a subordinate labor relationship governed by the LFT. A foreign company paying independent contractors, with no Mexican entity and no subordination, has no PTU obligation on those payments, though it should verify the relationship is genuinely one of independent services, not disguised employment, as covered in payroll for remote workers in Mexico.

Taxable income for PTU purposes is the fiscal result under Article 9 of the Income Tax Law, the same article that sets the corporate income tax rate. That article clarifies a point that causes confusion every year: PTU paid in the current year and prior years' tax losses are not subtracted from taxable income, which prevents a circular calculation where paid PTU would shrink the base for the next year's PTU.

How the 10% splits: half by days worked, half by wages earned

The 10% of taxable income splits into two equal halves distributed under different criteria, per Article 123 of the Federal Labor Law. The first half is distributed in proportion to the days each employee worked during the year, regardless of salary. The second half is distributed in proportion to the wages each employee earned in that same year.

A worked example with round numbers: a Mexican employer with 2,000,000 pesos of taxable income owes 200,000 pesos of PTU, 10% of that base. Of that total, 100,000 pesos goes to the days-worked half and 100,000 pesos to the wages half. If the workforce logged 6,000 worked days for the year, each day is worth 16.67 pesos; an employee with 300 worked days gets 5,000 pesos from that half. If the workforce earned 12,000,000 pesos in wages, each peso of wages is worth 0.0083 pesos of PTU; an employee who earned 600,000 pesos gets another 5,000 pesos. That employee's total PTU is 10,000 pesos, the sum of both halves.

Example item	Formula applied	Result
Company's total PTU	10% of 2,000,000 pesos of taxable income	200,000 pesos
Half by days worked	100,000 pesos over 6,000 total worked days	16.67 pesos per day
Half by wages earned	100,000 pesos over 12,000,000 pesos of total wages	0.0083 pesos per peso of wages
PTU for an employee with 300 days and 600,000 pesos in wages	(300 days x 16.67) + (600,000 x 0.0083)	10,000 pesos

The 2021 reform cap: three months of salary or a three-year average

The PTU cap is whichever amount favors the employee more between three months of salary and the average PTU received over the last three years, per Article 127, Fraction VIII of the Federal Labor Law, added by the reform published in Mexico's Official Gazette on April 23, 2021.

Before that reform there was no legal cap, which produced disproportionate amounts at small companies with very high taxable income in a single year. With three years of tenure, the employer compares the days-and-wages calculation against the average PTU paid over the prior three years, and pays whichever is larger between that average and three months of salary. With less tenure, only the three-month cap applies, since there is no three-year history to average.

An example of when the cap limits payment: if the days-and-wages calculation yields 40,000 pesos for an employee earning 8,000 pesos a month, the three-month cap equals 24,000 pesos. Since that is lower, the employee receives 24,000 pesos, and the 16,000-peso excess is not redistributed; it stays with the company.

Does the 2021 reform cap apply to every employer equally?

Yes, regardless of size or sector. Its effect is most visible at companies with small workforces and high taxable income in a single year, where the days-and-wages calculation can easily exceed three months of an employee's salary.

Who is excluded from profit sharing

Three categories are excluded from profit sharing under Article 127 of the Federal Labor Law. The first are general directors and administrators who run the entire business, not just one area. The second are partners or shareholders, who share in profits as owners, not as subordinate employees. The third are eventual workers who did not complete 60 days of work in the year, unless they are permanent staff separated during the year.

An area manager or department head who runs only one specific function, without authority over the whole company, still keeps the right to PTU: the exclusion applies to general management of the business, not to any title that includes the word "manager."

Person	Entitled to PTU	Reason
Permanent employee under a subordinate contract	Yes	The subject the profit-sharing right was designed to protect
Eventual worker with 60 days or more in the year	Yes	Meets the minimum days Article 127 requires
Eventual worker with fewer than 60 days	No	Does not meet the minimum days Article 127 requires
Area manager or department head	Yes	Runs one specific function, not the whole company
General director or sole administrator	No	Article 127 excludes general management of the business
Partner or shareholder	No	Shares in profits as an owner, not as an employee

Payment deadline, accrual, and penalties

The deadline to pay profit sharing falls 60 days after the date the employer must file its annual income tax return, per Article 122 of the Federal Labor Law. For corporations, whose return is due March 31, that deadline falls on May 30, 2026. For individuals with business activity, whose return is due April 30, it falls on June 29, 2026, as confirmed by the official microsite of the Federal Labor Defense Attorney's Office (PROFEDET).

The accounting accrual for PTU should not wait for the annual return. A company that can reasonably estimate its taxable income before year-end should recognize an estimated PTU liability as of December 31, adjusting the figure once the final amount is known. Delaying that accrual until the following year distorts the financial statements of the year that already closed.

What happens if the employer misses the PTU deadline?

The employee keeps one year, counted from the date PTU should have been paid, to claim it before the labor authority. A non-compliant employer faces a proceeding before Mexico's Labor Secretariat, free assistance PROFEDET offers the affected employee, and the penalties the Federal Labor Law sets for a noncompliant employer.

Income tax withholding on PTU: the 15 UMA exemption

PTU is exempt from income tax up to an amount equal to 15 times the Unidad de Medida y Actualizacion (UMA), Mexico's daily reference unit, per Article 93, Fraction XIV of the Income Tax Law. The UMA's daily value for 2026 is 117.31 pesos, per the notice INEGI published in January 2026, in force from February 1, 2026 through January 31, 2027. Fifteen times that value equals 1,759.65 pesos exempt per employee.

Back to the earlier example, an employee who receives 10,000 pesos of PTU has 1,759.65 pesos exempt, and the remaining 8,240.35 pesos is subject to income tax withholding under the wage-assimilated rates in Article 96 of the same law, applied to the taxable portion, not the total paid.

Does the 15 UMA exemption apply per employer or to the employee's total for the year?

It applies to the employee's total PTU received in the year, not to each employment relationship separately. An employee with two employers in the same fiscal year must add both amounts to determine how much exceeds 15 UMA and becomes subject to withholding.

What Soulbit automates when disbursing PTU, and what it does not

Soulbit does not calculate a Mexican employer's profit sharing, does not determine taxable income under Article 9 of the Income Tax Law, and does not apply the 2021 reform cap; that stays with the company's accountant or Mexican payroll software, along with income tax withholding and issuing the payroll CFDI. We cover that full payroll and CFDI flow in payroll for remote workers in Mexico: CFDI and payments.

What Soulbit automates is the step after the calculation: holding a balance in stablecoins like USDC and USDT and in fiat US dollars, euros, and pounds, converting between them on request, and disbursing the net amount already calculated to each employee, with traceability by beneficiary and by batch, whether it is PTU or recurring payroll.

In Mexico that disbursement does not reach a peso bank account today, because Soulbit V1 has no local banking rail in the country, as explained in receiving international payments in USDC in Mexico. An employee who receives PTU in digital dollars handles the peso conversion through their own bank or exchange house, and the employer still issues the CFDI, withholds income tax, and reports to the SAT, exactly as it would with a traditional transfer.

On the line between employee and independent contractor, which also decides who is entitled to PTU, see contractor vs employee: how to pay each one legally in LATAM. To compare the cost of international payroll against traditional banking, see the true cost of international payroll by bank transfer. Mexico's crypto asset regulatory context is covered in the Fintech Law and crypto assets for Mexican companies, and the country's full crypto payments guide is at crypto payments in Mexico.