Work out partnership profit sharing instantly with clear inputs, formula shown and shareable results.
A typical partnership deed allocates profit in stages: salary or work allowances first, recognising unequal effort, then the residual in capital ratio. Modelling both stages shows the effective share each partner receives, which is usually different from the headline capital ratio.
Residual profit
Residual = Total profit - Salary allowances
Capital share
Capital share = Residual x (Partner capital / Total capital)
Total entitlement
Total = Salary allowance + Capital share
Illustrative allocation only. Actual entitlements depend on the partnership deed, jurisdiction and tax treatment. Not legal, accounting or tax advice.
Deduct it before the residual alongside salaries, then split what remains in the profit-sharing ratio.
Salary allowances usually still apply, which deepens the residual loss shared in capital ratio — check what the deed says, as terms vary.