# Dpsp vs rsp



## The Dude (Feb 8, 2013)

I have a employee share plan at work and some of my shares are in a DPSP account and some other ones are in a RSP account. I don't really understand the difference between the two. Which one has less taxes when I withdrawal ?


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## Eclectic12 (Oct 20, 2010)

If by DPSP this is a Deferred Profile Sharing Plan, it would appear there is no difference from a taxes at withdrawal point of view. Both will be taxed as income on withdrawal, regardless of whether the gain was a capital gain, dividend or income.

http://www.cabusinessadvisor.com/Tax/TaxPlan/Corp/DPSP.htm
http://www.taxtips.ca/pensions/dpsp.htm

The difference I can think of is that the DPSP only allows company contribution when the company is profitable. Most RRSPs allow the employee to make contributions, at their choice and may also have company contributions. Company contributions are usually tied to either a matching amount (i.e. $1 from employee means the company contributes $1) or as a percentage of salary, regardless of whether the company is profitable.


Cheers


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