Deferred Profit Sharing Plan (DPSP)
Many employers would like to find a more cost-effective way to contribute to their employees’ retirement savings. The Deferred Profit Sharing Plan (DPSP) is a good choice, but in the past the setup was complicated. We now provide you an easy way to establish a DPSP for your business.
DPSPs can offer many benefits, including those you cannot achieve through making contributions to a Group RRSP:
Lower your Company’s Taxes: Your company’s taxable earnings are calculated after you have made contributions to your employees’ DPSP accounts. Any contributions you make towards your employees’ savings actually reduce your company’s taxable earnings.
Avoid Increases in Payroll Taxes: Employer contributions to a DPSP are exempt from federal payroll taxes, including Canada Pension Plan, Employment Insurance and other applicable provincial payroll taxes. Equally important, DPSP contributions are not a taxable benefit to your employees. This could mean additional savings.
Foster Productivity: Profit-sharing plans give your employees a direct stake in your company’s results. There’s no better way for a company to get top performance from your employees.
Retain Employees with Vesting: If you want to retain good employees, give them a reason to commit to your business. Your Deferred Profit Sharing Plan can be designed with a vesting schedule that encourages long-term thinking.
Maintain Flexibility: You decide how much and how often you’ll contribute.