Go to the Globe and Mail homepage

Jump to main navigationJump to main content

 

 

Types of workplace savings plans

Three things to know about Employee Profit Sharing Plans Add to ...

An EPSP allows you to share in the profits of the company you work for. Your employer is required to make contributions to the EPSP according to a formula based on its profits.

Three things to know about EPSPs

  1. EPSP contributions are allocated to employees each year. You may also be allowed to make contributions.
  2. An EPSP is not a registered plan. Your contributions are made from your after-tax earnings. You must pay tax on employer contributions allocated to you each year, and on any investment earnings these allocations earn.
  3. Some employers let you choose each year between having your EPSP allocation paid out to you or having it remain in the EPSP account.

The federal government is concerned that EPSPs may be used to steer profits to family members in order to reduce or defer taxes, or to avoid making Canada Pension Plan (CPP) contributions and paying EI premiums. They have engaged in a consultative process with stakeholders to review the existing rules.

More Related to this Story

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

 
Globe Investor - GIT Upsells
It's never been a better time to get Globe Unlimited
Try Globe Unlimited, featuring new Globe Investor Tools, for a special trial rate. Only 99¢ for your first month.

Are you a Globe Investor Gold subscriber?
You qualify for complimentary access to Globe Unlimited.
Visit: globeandmail.com/globeplusunlimited
Try it today

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories