PTU stands for Participación de los Trabajadores en las Utilidades, meaning "Workers' Participation in Profits." It is a constitutional right in Mexico that requires employers to share 10% of their pre-tax profits with employees. This is not a discretionary bonus — it is a legal obligation enshrined in Mexico's Federal Labor Law.
How PTU Is Distributed
The 10% profit pool is split into two equal halves. The first 50% is distributed equally among all eligible employees based on the number of days worked during the fiscal year. The second 50% is distributed proportionally based on each employee's total salary earned during the year. This ensures both equal and proportional distribution.
2021 Reform Cap
A 2021 labor reform introduced a cap on individual PTU payments: each employee receives the greater of (a) 3 months of salary or (b) the average PTU received in the prior 3 years. This reform was designed to limit extremely large PTU payments at highly profitable companies while protecting workers at smaller firms.
EOR Relevance
An EOR in Mexico handles the PTU calculation, applies the distribution formula, ensures payment by the May 30 deadline, and manages tax withholding on PTU payments. For foreign companies unfamiliar with profit-sharing obligations, the EOR ensures this unique Mexican requirement is properly fulfilled.