Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Copy of Overtime Primer: Highlights from the New Regulations

The federal DOL overtime regulations go into effect this year. Are you ready?

Download Now!

This report includes a summary of key changes, including the salary level test and salary basis test.

As a bonus, we've included a handy flowchart to help you determine exemption status under the FLSA.

Download Now!
April 18, 2010
Compensation 101: Profit Sharing Plans

A profit sharing plan is an employee reward in which a portion of company profits is shared with all employees. There are two types: qualified and non-qualified. Qualified plans are subject to certain IRS requirements, whereas non-qualified plans provide greater flexibility. Payouts from profit-sharing plans may be made in cash and/or company stock. Alternatively they may be deferred to retirement. In a BLR webinar titled "Compensation 101: Essential Secrets and Strategies for HR Professionals," Paul R. Dorf talked about some of the characteristics of qualified versus non-qualified plans:

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!


  • Subject to IRS regulations
  • Most employees treated the same
  • Enhances retirement


  • Not subject to IRS regulations
  • Can differentiate awards
  • Paid out at year-end

Profit sharing can be a nice reward, but often do not motivate employees in the same way as a true incentive.

Paul Dorf is the Managing Director of Compensation Resources, Inc. (CRI). CRI ( specializes in providing comprehensive Compensation and Human Resource consulting services. Dorf is responsible for directing consulting services in all areas of executive compensation, short and long term incentives, sales compensation, performance management programs, and salary admin programs.

Featured Special Report:
Top 100 FLSA Overtime Q&As
Twitter  Facebook  Linked In
Follow Us
Copyright © 2016 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on
Document URL: