Sample Profit Sharing Plan Document

This specimen document has been provided to assist you in drafting a summary plan description spd for our mutual clients that have adopted the ing life insurance and annuity company 401 k prototype plan document.

Sample profit sharing plan document. This profit sharing agreement template is written in a manner so that it can apply to a situation whereby a company has hired someone to market a product for them and offered a share of the profits on the sale of the product. Profit sharing is also a form of incentive for your most valuable employees. It allows you to choose how much to contribute to the plan out of profits or otherwise each year including making no contribution for a year. Profit sharing plans have additional advantages.

A bonus plan is very much dependent on either annual turnovers or on the current value of the stock of a company. Please consult a tax advisor or legal counsel when deciding the proper course of action for your plan. The profit sharing as an incentive heightens the motivation of the workers to perform better because it is their own. Profit sharing fidelity provides the following general guidelines for employers to terminate profit sharing plans.

Profit sharing agreement template pandatip. Information and document request profit sharing plan each of the listed items has a purpose in the examination process so all are important. This combination results in a total contribution of 23 500 all of which is tax deductible as an employer contribution. Sample is a profit sharing plan only with an allocation formula that is the same dollar amount to all participants and also includes a loan feature.

If any requested information or document presents a problem for you or is available in electronic or other form please contact me to let me know and discuss possible alternatives. Psps are as old as taxes in the us and have become a staple in the economy once business owners realized that profit sharing could reduce their tax liabilities. Free 7 sample bonus plan templates in pdf a bonus is usually an additional payment given to the employees along with their fixed salary at certain time of the year. Step 1 of 6.

This information is not intended as legal or tax advice. N can help attract and keep talented employees. A profit sharing plan also known as a psp is the document that specifies what share of profits employees will receive eligibility requirements and other details. A profit sharing plan is a type of plan that gives employers flexibility in designing key features.