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What Are Profit Sharing Plans?

By Kailey Hagen – Updated Nov 6, 2024 at 5:26PM

Key Points

  • Profit sharing plans let employers contribute up to 25% of compensation or $69,000 annually in 2024 ($70,000 in 2025).
  • Contributions can be vested immediately or over time, depending on the employer's rules.
  • Employers must allocate contributions fairly among all eligible employees, following a set formula.
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