In Mexico, the month of May marks the beginning of the official period for the distribution of profits, one of the most anticipated labor benefits by Mexican workers. The Federal Attorney for Labor Defense (Profedet) reported that all formal workers have the right to receive this benefit, which constitutes a part of the profits generated by companies during the last year. The law establishes that the deposit of profits must be made in a timely manner, without the possibility of suspension, negotiation, condition, or in-kind delivery.
According to current regulations, companies must allocate and distribute among their workers 10% of the profits obtained during the last year. This calculation is made based on the information reported by companies to the Tax Administration Service (SAT) in their annual tax return submitted in March.
The Secretary of Labor and Social Welfare (STPS), the SAT, and Profedet provide answers to key questions about profit distribution, such as what it implies, how it is determined, and when payment is made. The distribution of profits is a constitutional right of workers to receive a part of the company's profits, calculated based on the time worked, the salary received, and the profits reported to the SAT.
The amount of profits is divided into two equal parts: 50% is calculated according to the days worked by each employee, and the other 50% is distributed in proportion to the wages earned during the year. The legislation that supports this right is found in Article 123 of the Political Constitution and Article 120 of the Federal Labor Law, which establish that all workers have the right to participate in the profits of the companies where they work.
The base salary considered for the distribution of profits is exclusively the daily quota salary, excluding other income such as overtime or bonuses. In the case of trusted workers, the cap salary is calculated by adding 20% to the salary of the highest-paid unionized or base worker, elevated to the year. The distribution of profits must be done no later than May 30 for workers of companies and June 29 for workers of an individual (employer).
