Profit-Sharing Plan

A retirement plan for small businesses
  • Flexible contribution amounts that can vary from year to year
  • Deduct employer contributions as a business expense
  • Offers a full range of investment choices
  • Use the Small Business Selector to find a plan

up to 25% of compensation

or $54,000 in 2017 ($55,000 in 2018), whichever is less

December 31

setup deadline for the plan (December 29 for 2017)

Flexible Contribution Amounts - image

Eligibility information

Employees who are age 21 or older and have worked at the company for at least one year (two years if the plan does not have a vesting schedule)

Tax benefits - image

The flexibility to invest how you want

Let E*TRADE Capital Management manage your account, or diversify with a choice of mutual funds, ETFs, stocks, and more

More for you and your employees - image

Tax-deferred growth potential

All investment earnings are tax-deferred; participants pay taxes only upon distribution

A full range of investments - image

Additional features

You can create a vesting schedule for the plan, and your employees can borrow money against their accounts

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Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works

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Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works

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Profit-Sharing Plan FAQs

See all FAQs

Already have a Profit-Sharing Plan? Contribute now.

What are the eligibility requirements for Profit-Sharing Plan?

  • A Profit-Sharing Plan is a retirement account for self-employed individuals and owners of small businesses
  • Employees are eligible based on the following criteria:
    • For plans with no vesting schedule:
      • Any employee age 21 or older and
      • Has worked for the company at least for two years
    • For plans with a vesting schedule:
      • Any employee age 21 or older and
      • Has worked for the company for at least one year

What is a vesting schedule?

A vesting schedule determines how rapidly the employer contributions in a participant's account become non-forfeitable (i.e. belong fully to an employee).

Is it possible not to include employees in a Profit-Sharing Plan?

Any employee age 21 or older working for the company at least for two years must be included in the plan if the plan does not offer a vesting schedule. For plans with a vesting schedule, any employee age 21 or older and working for the company for at least one year must be included.

Is IRS Form 5500 filing required for a Profit-Sharing Plan?

Yes, an annual IRS Form 5500 filing is required for a Profit-Sharing Plan.