Profit-sharing is a form of an incentive program, which gives workers a quarterly or annual income percentage of the business. The sum is only granted if a business benefits during that period.
WORKING OF PROFIT SHARING PLANA profit-sharing agreement can operate in different ways, but usually, it is when a business pays in a portion of its pre-tax income, which is then allocated to qualifying workers. The distribution can vary depending on the salary of each employee. If this portion is established, either HR professionals or C-suite management have to prepare a plan as part of their distribution benefits management program.
- Opt a written strategy
- Set up a trust for the properties of the plan