Define: Profit-Sharing

Business, Legal & Accounting Glossary

Definition: Profit-Sharing



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Full Definition of Profit-Sharing


Profit-sharing is an arrangement between an employer and employees in which the former shares part of its profits with the latter. Profit-sharing plans are a way to keep employee morale, loyalty, and retention up. Employees can be given stocks (often stock in the company they work for) or bonds, or cash. To determine how much an employee will receive with profit-sharing, the employer uses government-approved formulas. If the profit-sharing contributions are part of an employee’s retirement plan (in which case they are received at retirement rather than now), they may be tax-deductible. There are eligibility requirements for profit-sharing plans; for example, the employee must work for the company for a certain period before he or she can partake in profit-sharing.


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https://payrollheaven.com/define/profit-sharing/
Modern Language Association (MLA):
Profit-Sharing. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 06, 2020 https://payrollheaven.com/define/profit-sharing/.
Chicago Manual of Style (CMS):
Profit-Sharing. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/profit-sharing/ (accessed: April 06, 2020).
American Psychological Association (APA):
Profit-Sharing. PayrollHeaven.com. Retrieved April 06, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/profit-sharing/

Definition Sources


Definitions for Profit-Sharing are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 1st April, 2020