Where Does Profit Sharing Work?

What Is Profit Sharing? Profit sharing can work in a variety of ways. The company contributes part of its pre-tax profits into a pool that is distributed among eligible employees. Amounts distributed can be dependent on salary, and profit sharing can be used as a supplement to existing benefit plans as well.

How does profit-sharing usually work?

A profit-sharing plan gives employees a share in their company's profits based on its quarterly or annual earnings. It is up to the company to decide how much of its profits it wishes to share. Contributions to a profit-sharing plan are made by the company only; employees cannot make them, too.

What companies do profit-sharing?

Businesses that are majority- or part-owned by employees cover a wide range of industries, such as supermarkets like Publix, clothing makers like Gore and consumer goods company Procter & Gamble. Others, such as automaker Ford and airlines Delta and Southwest, offer generous profit sharing programs.