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DPSP - Deferred Profit Sharing Plan
Share Success with Your Team

A tax-efficient way to share company profits with employees while building their retirement security.

What is a DPSP?

Often paired with a Group RRSP, a DPSP allows the employer to share company profits with employees in a tax-efficient way. Employer contributions are tax-deductible and grow tax-deferred inside the plan.

Unlike RRSPs, only employers can contribute, and funds vest over time, which can also help with employee retention. It's an excellent way to align employee interests with company success while providing valuable retirement benefits.

Employer Contributions Only

Share profits when company performs well

Tax-Deductible

Employer contributions are fully tax-deductible

Vesting Schedule

Funds vest over time, helping with retention

Profit Sharing

Employer-Funded

No Employee Contributions

100% employer-funded benefit

Performance-Based

Contributions tied to company success

Flexible Timing

Contribute when profits allow

Tax Benefits

Tax Deductible

Employer contributions reduce taxable income

Tax-Deferred Growth

Investments grow without immediate tax

Employee Benefit

No taxable benefit until withdrawal

Vesting Schedule

Gradual Vesting

Funds vest over time (typically 2 years)

Retention Tool

Encourages employees to stay longer

Full Ownership

Complete ownership after vesting period

How DPSP Works

Share success through structured profit sharing

1

Company Profits

Company generates profits during the year

2

Contribution Decision

Employer decides to share profits with employees

3

Fund Allocation

Contributions allocated to employee accounts

4

Vesting & Growth

Funds vest over time and grow tax-deferred

DPSP + Group RRSP Combination

Powerful Combination

Many employers offer both DPSP and Group RRSP together for comprehensive retirement benefits.

Group RRSP for regular employee savings
DPSP for performance-based rewards
Maximum retirement security for employees

Annual Contribution Limits

DPSP Maximum: Lesser of $31,560 or 18% of salary
Combined with RRSP, total cannot exceed annual RRSP limit

Perfect For

Profitable Companies

Businesses with consistent profits who want to share success with employees.

Variable Compensation

Organizations wanting flexible compensation strategies tied to performance.

Employee Retention

Companies focused on retaining talent through long-term incentives.

Vesting Schedule Options

Choose the right vesting approach for your organization

Cliff Vesting

  • 100% vesting after 2 years
  • 0% vesting before 2 years
  • Simple and clear structure

Graded Vesting

  • 20% per year over 5 years
  • Gradual ownership increase
  • Stronger retention incentive

Share Your Success with a DPSP

Align employee interests with company performance through tax-efficient profit sharing.

Set Up DPSP Call: 1-888-676-4689