What is a DPSP?

A Deferred Profit Sharing Plan (DPSP) is a workplace savings program that many businesses use for employee incentives, or to help them save for retirement.

Only employers can contribute to a DPSP. The annual contribution limit is either 18% of the employee’s annual earned income or half of the money purchase limit (up to $15,390 for 2022), whichever is less.  DPSP contributions made on behalf of an employee in a particular year reduce the employee’s Registered Retirement Savings Plan (RRSP) contribution room for the following year.  For example, if an employer contributes $1,000 to a DPSP in 2022, the employee’s RRSP contribution room will decrease by $1,000 in 2023.

DPSP contributions grow tax-free while they’re in the plan but are taxed when the employee withdraws the funds.

Stay Connected

Sign up today to get the latest retirement savings advice delivered straight to your inbox
 

Search

Find what you’re looking for:

We use cookies on our website so we can continually improve your online experience. Cookies allow us to have an overview of your visit so we can ensure you get the most relevant information.