Profit Sharing Calculator

Calculate profit sharing distributions for your employees.

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Profit Sharing

Enter the company profit and allocation method.

Total profit sharing pool
$0
Per employee (avg): $0
Profit sharing pool
$0
Per employee (equal)
$0
Per employee (% of salary)
0%
Avg bonus per employee
$0
As % of profit
0%
After-tax bonus (est.)
$0

Worked example

With the default inputs shown below, this calculator returns the following results:

InputValue
Annual company profit ($)$500,000
Profit sharing pool (%)15%
Number of eligible employees20
Allocation methodProportional to salary
Average salary ($)$60,000
ResultValue
Total profit sharing pool$75,000
Profit sharing pool$75,000
Per employee (equal)$3,750
Per employee (% of salary)6.3%
Avg bonus per employee$3,750
As % of profit15%

Values shown are produced by this page in your browser; change any input to update them.

How to use the Profit Sharing

  1. Annual company profit ($) — default $500,000
  2. Profit sharing pool (%) — default 15%
  3. Number of eligible employees — default 20
  4. Allocation method — default Proportional to salary
  5. Average salary ($) — default $60,000
  6. Press Calculate to update the results instantly.

Frequently asked questions

The company sets aside a percentage of profits into a pool, then divides it among employees, often by salary or equally.
Yes, it is ordinary income. Cash bonuses are taxed when received; contributions to a retirement plan may be tax-deferred.
Common pools are 5-15% of profits, which usually works out to 2-8% of payroll. It varies widely by company size and sector.

Sources & references