Employees profit sharing plan

An employees profit sharing plan (EPSP) is an arrangement that allows an employer to share profits with all or a designated group of employees. Under an EPSP, amounts are paid to a trustee to be held and invested for the benefit of the employees who are beneficiaries of the plan.

Each year, the trustee is required to allocate to such beneficiaries all employer contributions, profits from trust property, capital gains and losses, and certain amounts in respect of forfeitures.

Report payments from EPSPs on a T4PS slip instead of a T4 slip. You must show on the T4PS slip if the employee is a specified employee: one who is dealing with the employer in a non-arm's length relationship, or who has a significant equity interest (10% or more of any class of shares) in their employer or a company related to their employer. If the amount paid to the specified employee is more than 20% of that employee's total income for the year from employment with the employer, a tax will apply to the exceeding amount.

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