profit sharing
Also called: pembagian keuntungan
Distribution of family business profit according to the capital share or an agreement made together.
What it means
Profit sharing is the distribution of profit from a business or partnership based on an agreed ratio. In families, profit sharing is commonly used when one member provides capital and another runs the business. The size of the share is determined at the start, not after the profit becomes visible.
Why it matters for families
Profit sharing that is not agreed at the start easily turns into a sense of unfairness. One party may feel their capital is not valued, while the other feels their effort is underappreciated. A written agreement on the share and how profit is calculated keeps the relationship healthy.
Example
An older sibling provides Rp10 million in capital for their younger sibling's food stall with an agreement of 30 percent profit sharing from net profit. Profit is calculated after ingredient and operational costs. Each month both review the sales records together.
Common misunderstanding
Many calculate profit sharing from revenue, not profit. In fact, profit sharing should be calculated from net profit so it is fair to both.