Excess employees profit-sharing plan (EPSP) amounts – Salaried employee expenses

If an excess amount has been contributed to a specified employee’s EPSP in 2023, the excess EPSP amount is subject to a special tax.

A specified employee is a person who deals with an employer in a non-arm’s length relationship or who owns, directly or indirectly, at any time in the year, not less than 10% of the issued shares of any class of the capital stock of the employer corporation, or any other corporation that is related to the employer corporation.

Generally, an excess EPSP amount is the part of an employer’s EPSP contribution, allocated by the trustee to a specified employee that is more than 20% of that employee's income from employment received in the year from that employer.

How to calculate the excess EPSP

To calculate the excess EPSP amount and the special tax that applies to it, get Form RC359, Tax on Excess Employees Profit Sharing Plan Amounts, or by calling 1-800-959-8281.

Forms and publications

• Form RC359, Tax on Excess Employees Profit Sharing Plan Amounts