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Cash Profit Sharing Plan
Distributes a percentage of profits as cash or stock.
EPSP
Formal cash plan paying into trust accounts for employees.
Tax Implication of EPSP
Taxed as income in the year of contribution.
Employee Contribution in EPSP
Some plans allow employee contributions to trusts.
DPSP
Deferred plan saving profits for retirement benefits.
DPSP Tax Benefits
Registered for tax breaks; employer contributions deductible.
DPSP Withdrawal Rules
: Withdrawals taxed as income after retirement.
Employer Contributions to DPSP
Only made when the employer has profits.
DPSP Contribution Minimum
Must be at least 1% of profits.
DCPP
Defined Contribution Pension Plan, similar to DPSP.
DPSP vs DCPP
DPSP reduces employer risk during low profit years.
Motivation through DPSP
Profit sharing can enhance employee motivation.
DPSP Disadvantages
Can create morale issues among employees.
Low Profit Impact on DPSP
Low profits may lead to minimal employee benefits.
Investment Restrictions in DPSP
Cannot invest in company's stock or debt.
Contributions Timing for DPSP
Contributions may be quarterly or yearly.
Note 
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