Profit-Sharing Plan

Filed Under » Investor Relations

	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.

Related Definitions

Option

A financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to ...
Read More »
Qualified Retirement Plan

A plan that meets requirements of the Internal Revenue Code and as a result, is eligible to receive certain tax benefits. These plans must be for the exclusive benefit of employees or ...
Read More »
Collective Investment Fund

A fund that is operated by a trust company or a bank and handles a pooled group of trust accounts. Collective investment funds combine the assets of various individuals and organizations ...
Read More »
- Cash Or Deferred Arrangement - CODA
  
  The method of funding any type of qualified profit-sharing or stock bonus plan. Cash or deferred arrangements allow employees to contribute a portion of their salaries to the plan so ...
  Read More »

The 401(k) and Qualified Plans Tutorial

Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
Read More »
Is An ESOP Right For Your Business?

Discover how to transfer your company's net worth to the next generation of entrepreneurs.
Read More »
Retirement Planning: Building A Nest Egg

Find the right mix of investments for your portfolio.
Read More »
- 401(k) Plans For The Small Business Owner
  
  If you own a business, this may be the plan for you! Find out about its benefits and eligibility requirements.
  Read More »
- The Investing Risk Of Underfunded Pension Plans
  
  Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  Read More »
- A Guide To CEO Compensation
  
  Make sure you assess whether a CEO has a stake in doing a good job for you, the shareholder.
  Read More »
- Can I contribute the maximum to multiple employer retirement plans?
  Read More »
- Should I choose an SBO-401(k) or a SIMPLE IRA for my company?
  Read More »
- Job Hunting: Higher Pay Vs. Better Benefits
  
  Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff.
  Read More »
- What types of plans allow catch-up contributions?
  Read More »
- What is the difference between a Keogh and an IRA?
  Read More »

Disbanding The Euro	Is Bank Of America In Danger?		The Greatest Currency Trades Ever Made	The Enron Collapse: A Look Back
	Day Trading Strategies For Beginners	The Biggest IPO Flops	How HELOCs Can Hurt You