Deferred Profit Sharing PlansA deferred profit sharing plan is a tax assisted plan for sharing profits with employees. It allows for contributions by the employer towards an individual’s retirement and contributions are tax deductible to a specified annual limit.Deferred Profit Sharing / RRSP combination plans have become a popular and flexible in design. In such plans, the employee contribution into the RRSP is matched by an employer contribution into the DPSP. This affords the employer two benefits: vesting of employer contributions and avoidance of payroll tax on employer contributions (as would be the case with employer contributions into an RRSP). |
