A non profit org wants to adopt a profit sharing plan.
There are about 15 employees, with wages ranging from $20,000 to $85,000.
Is there anything wrong with making contributions of $20,000 to everyone?
No one would get more than 100%. But the total contribution would be $300,000 ( 15x $20,000)
But how would that affect the deduction of 25% limit,? Total comp is $650,000 so 25% would be $162,500.
Since non-profit cannot deduct anyway

Thanks in advance.

My understanding is that the deduction limitation applicable to "for profit" entities does not apply to non-profits.

I try not to disagree with Mike.
BTW, if this "non-profit" has enough cash to make a PS contribution of 46% of total payroll, could someone (IRS perhaps) question its non-profit status?
I'm just curious.

Don't we need to make sure that the non profit has "at all times been exempt from Federal income tax", including non-payment of UBTI? And never have had a taxable subsidiary?

These issues are more common than one might think.

Good point, Andy.

Good points. Thanks very much
They appear to be legit in all areas.
So assuming they are truly non-profit- it looks like we agree they are not limited to 404. I know the three of you are among those most likely to know- so since no one rebuts, it seems OK.
Are they limited to anything else like using a uniform formula, including a flat dollar?

Thou shalt not violate Section 415.
And 401(a)(4), although appears to be a no-brainer from your original data.