Profit Sharing Plan

Definition

A plan that gives employees a share in the profits of the company. The company can defer a certain portion of profits to be shared with employees, which is additive to 401(k) limits and increases the total amount employees can save for their retirement. Companies have until they file their taxes in the following plan year to make this elective contribution, providing business owners with flexibility.

Explanation

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. There are typically restrictions as to when and how employees can withdraw these funds without penalties.

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Take the next step. Call our retirement specialists today at (214) 891-8131 to discuss the workplace savings plan that may be right for you and your business. Or, contact us via the form below and one of our retirement plan specialists will respond to your inquiry.