DEFINITION of 'Profit-Sharing Plan'
A plan that gives employees a share in the profits of the company. Each employee receives a percentage of those profits based on the company's earnings.
Also known as "deferred profit-sharing plan" or "DPSP."
INVESTOPEDIA EXPLAINS 'Profit-Sharing Plan'
This is a great way to give employees a sense of ownership in the company. The company decides what portion of the profit will be shared. And there are typically restrictions as to when and how you can withdraw these funds without penalties.
The method of funding any type of qualified profit-sharing or ...
A fund that is operated by a trust company or a bank and handles ...
A financial derivative that represents a contract sold by one ...
A plan that meets requirements of the Internal Revenue Code and ...
The total dollar amount contributed in a given year to a participant's ...
Shareholders who hold their shares directly with a company.