A profit sharing plan is a qualified retirement plan where contributions are credited to the account of each participant according to his or her compensation. Plan investment earnings are also credited to each participant's account. At retirement, each participant is distributed the vested balance that their account has grown to. Contributions to profit sharing plans are discretionary and thus are not required contributions.

An example of a simple profit sharing study can be viewed below.

Profit Sharing Study 1

Profit Sharing FAQs