What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why?

Need a paper written? Our academic experts can create an original essay on any subject for ~~$13.00~~ $11/page Learn More

There are four types of profit-sharing plans (PSP): cash or current distribution PSP (CPSP), employee’s PSP (EPSP), deferred PSP (DPSP), and registered pension PSP (PPSP). EPSP, DPSP, and pension accumulate in a trust fund together with interest, whereas CPSP is distributed regularly in cash. DPSP and PPSP are taxed when the money is granted, while CPSP is taxed with salary payments, and EPSP are taxed annually. All plans but CPSP are registered under some sections of the Income Tax Act. Access to the money is given immediately in case of CPSP, and in the other three plans, employees gain access upon retirement or termination.

–	Cash	DPSP	EPSP	Pension
Employer	+ (employer controls the withdrawal)			+ (employer’s contributions pertain to profits to some extent)
Employee		+ (it is possible to make a withdrawal before retirement)	+ (the number of years at a company and other factors can increase the amount of money)

Rate the answer:

Further research on topic

Organizational Profits and Their Limits

Answer by Academic.tip's expert

An answer to this question is provided by one of our experts who specializes in business & economics. Let us know how much you liked it and give it a rating.

Cite this page

Select a citation style:

References

Academic.Tips. (2022) 'What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why'. 12 February.

Reference

Academic.Tips. (2022, February 12). What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why? https://academic.tips/question/what-are-profit-sharing-plans-and-how-do-they-compare-from-the-government-of-canadas-perspective-who-would-prefer-which-of-the-4-types-and-why/

References

Academic.Tips. 2022. "What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why?" February 12, 2022. https://academic.tips/question/what-are-profit-sharing-plans-and-how-do-they-compare-from-the-government-of-canadas-perspective-who-would-prefer-which-of-the-4-types-and-why/.

1. Academic.Tips. "What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why?" February 12, 2022. https://academic.tips/question/what-are-profit-sharing-plans-and-how-do-they-compare-from-the-government-of-canadas-perspective-who-would-prefer-which-of-the-4-types-and-why/.

Bibliography

Academic.Tips. "What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why?" February 12, 2022. https://academic.tips/question/what-are-profit-sharing-plans-and-how-do-they-compare-from-the-government-of-canadas-perspective-who-would-prefer-which-of-the-4-types-and-why/.

Work Cited

"What are Profit Sharing Plans and how do they compare from the Government of Canada’s perspective? Who would prefer which of the 4 types and why?" Academic.Tips, 12 Feb. 2022, academic.tips/question/what-are-profit-sharing-plans-and-how-do-they-compare-from-the-government-of-canadas-perspective-who-would-prefer-which-of-the-4-types-and-why/.

Copy