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Under profit-sharing plans, company profits are shared with employees. Profit sharing plans are a group-level incentive plan in which company profits are shared with employees. Procedurally, profit sharing can be distributed to employees as cash or can be deferred. Under a deferred profit sharing plan, the incentive money paid to an employee is put into a retirement account for the person. The plan has a tax advantage because the income the employee earns is deferred until retirement, and after retirement, earnings are generally lower, so the income withdrawn from the retirement account is taxed at a lower rate. Implementing profit-sharing plans helps keep employees focused on important activities, and by focusing employees' efforts on the company's performance rather than solely on their own, profit sharing plans can lead to greater success.