Profit-Sharing Plans Which type is best for your business?

Oct 30, 2002

Profit sharing is popular because it is simple, its measures areunderstandable, and everybody--from the lowest employee to thecompany's owner--has a stake in profits. Make a profit andeverybody gets to keep her job and the investors in the company arehappy. Profit-sharing plans include both immediate cash payoutplans and deferral plans. A payout plan pays cash to eligibleemployees at the end of a stated period of time, typically at theend of the company's fiscal year. A deferral plan can take manyforms. The company could make deposits on behalf of employees intotheir IRA or 401(k) plans. Deferral plans can have tax advantagesfor employees.

Excerpted from Attracting & Rewarding OutstandingEmployees

Editor's Pick

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.

I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.

Want to Break Bad Habits and Supercharge Your Business? Use This Technique.

Franchise Ownership Made Easy: Best Practices for Managing and Growing Your Business

Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.

Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Most Popular

See all

Business News

'All Hell Is Going to Break Loose': Barbara Corcoran Issues Warning About Real Estate Market, Interest Rates

The "Shark Tank" star appeared on FOX Business' "The Claman Countdown" this week.

By Emily Rella

Leadership

How do You Turn Employees Into Problem-Solvers? Follow This 3-Step Leadership Formula.

As leaders, we need to solve company problems effectively. We often have the urge to fix everything quickly, but is this system of problem-solving really sustainable?

By Baptiste Monnet