Employee profit-sharing plans put a percent of your company’s profits into your hands.
In an EPSP, your employer puts a percent of their profits into a savings account for you each year. You can often choose to contribute to the plan as well.
The amount you receive is calculated by a formula tied to the company’s profits that year – so, if profits are high, you’ll receive more, and vice versa.
- Your employer sets up a plan and chooses how much to share.
- An amount of money tied to the company’s annual profits is contributed to an individual account for you.
- You may be able to contribute money of your own and have input on how it’s invested.
Manage your workplace savings plan using your online account. Check your balance, make account changes, create a retirement plan and more.
All of your employer’s contributions – and any investment income those contributions earn – will be part of your taxable income. In other words, you’ll be taxed as though your employer paid you a higher salary.
Your access to the money in your EPSP depends on the plan. Some plans let you access the money in the account immediately, while others may not until you retire. Once it’s yours, there are no restrictions on how you can use it.
If you’re not sure what your restrictions are, you can sign into your accountOpens a new website in a new window or talk to your employer about your plan’s vesting rules.