Profit-Sharing Plan
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
Articles Of Interest
-
The Investing Risk Of Underfunded Pension Plans
Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan. -
Is An ESOP Right For Your Business?
Discover how to transfer your company's net worth to the next generation of entrepreneurs. -
A Guide To CEO Compensation
Make sure you assess whether a CEO has a stake in doing a good job for you, the shareholder. -
Job Hunting: Higher Pay Vs. Better Benefits
Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff. -
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. -
I have several jobs. Can I contribute the maximum to multiple employer retirement plans?
It depends. A question such as this requires detailed information in order to provide a helpful response. Here is a general response that may be of help. Questions: Are any of these companies ... -
My company has three partners but plans to hire more this year. Would we be better off with an SBO-401(k) or a SIMPLE IRA?
It depends.The SBO-401(k) plan is suitable if the plan covers only the business owners - in this case, the partners in the partnership. If the other employees who are not owners of the business ... -
What types of plans allow catch-up contributions?
Catch-up contributions can only be made to plans with salary deferral features.If you want to make catch-up contributions, you will need to amend your profit-sharing plan to include a salary ... -
What is the difference between a Keogh and an IRA?
The Keogh plan, or HR10, is an employer-funded, tax-deferred retirement plan designed for unincorporated businesses or self-employed persons. The Keogh plan, named after U.S. Representative Eugene ... -
The 401(k) and Qualified Plans Tutorial
Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
Free Annual Reports