Profit Sharing Definition
Profit sharing is a way for a business to share a portion of the profit it has generated with employees.
Profit Sharing Expanded Definition
Businesses can voluntarily share a portion of their profits with employees. A formal document known as a Profit Sharing Plan must be drawn up outlining terms for participation, funding, and distribution.
Usually, businesses calculate profit sharing based on a percentage of an employee’s annual pay.
Last Updated By
Christan Neff | Apr 17, 2023