Note published in El Economista, Empresas [Companies] section by María del Pilar Martínez.
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Note published in Factor Capital Humano, Leyes y Gobierno [Laws and Government] section by Pilar Martínez.
Read the note in its original source
In the Sixth National Commission on Employee Participation in Company Profits (PTU), employers and the government agreed to keep employee profit sharing at 10%.
The National Commission on Employee Participation in Company Profits (PTU), comprised by workers, employers and the government, agreed to keep employee profit sharing at 10%.
“With the participation of the worker and employer sectors, as well as that of the Federal Government, it was decided to keep the percentage of company profits to be distributed among the workers at 10%, given the importance of ensuring that the workers have a fair income and thus recover the purchasing power provided by their income in order to improve their quality of life”, informed the Department of Labor and Social Welfare (STPS) in a statement.
It should be noted that the process for defining the new PTU payment percentage began in August, 2019. Every 10 years, the government must review this type of benefits provided to the workers.
In this regard, Oscar de la Vega, D&M labor specialist, explained that the decision to keep the same percentage of profit sharing makes it too high, since market conditions have changed, and keeping this percentage entails a huge effort, as “the behavior of the economy has changed, also because we are facing the most important change in labor matters and a crisis deriving from the pandemic”.
He added that “there has been deceitfulness in the modes of hiring for several reasons, among them, the high percentage on profits that is paid to workers; this percentage has remained unchanged for four decades. It nullifies the country’s competitiveness”,
The legal basis
The percentage of profits to be distributed among workers amounts to 10% of taxable income for Income Tax purposes. This amount is divided into two equal portions (Articles 117, 118, and 120, LFT [Federal Labor Law]).
The first portion, that is, 5%, is distributed among all workers, taking into account the number of days worked by each one of them in the year in question, while, the second portion is distributed based on the salary received by the workers in that same year (Article 123, LFT).
Payment is made within 60 days after the annual income tax return is filed; to prove this, the corresponding CFDI [Digital Tax Receipt] must be issued (Article 122, LFT).
Therefore, the 30th of May of each year is the deadline for distributing profits in the case of workers employed by a legal entity (company), while the people who work for a natural person (employer) must receive this payment no later than June 29.
In the event that an employer fails to make the payment of profit sharing, he will become subject to a fine ranging from 250 to 5,000 UMAs [Units of Measure and Update], currently, between 21,720.00 and 434,000.00 pesos (Article 994, Section II, LFT)
(Includes information from IDC online)
