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HomeRecruitment GuideGlossary Terms A-ZProfit sharing plan
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Profit sharing plan

A profit sharing plan is a type of qualified retirement plan for employees that is initiated and maintained by a business-owner. In a profit sharing plan, employees as well as any of their beneficiaries are allowed to partake in the profits of the business. Using this kind of a benefit plan is good for both employees and their employers, especially if the business in question is still in its early stages of development. If a person has just started a business, a large portion of resources need to be dedicated to ensuring the consistent quality of whatever good or service is being offered rather than on extensive employee benefits, so this is a good way to still have an incentive for workers.

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The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.

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