Well, this isn't a point of law, but what your contract says.If you ave no contract, then it is what you both thinbk it means, which you are evidently at odds.
He appears to be factoring everything you cost him. which I guess is fair in that if you didn't exist , he would not have those expenses
Employers are on the hook for all those workers comp isurance, SS, etc
which is why so many employers try to "1099" employees when they should not be "1099'd"

Of course if he raiseds the bar so high, no one will ever or rarely get incentives, might as well not have incentives, as they would become "mythical benefit" like the trip to hawaii no one has ever 'won" inthe sales contest.

he and the employees need to come to a written agreement , so everyone knows where they statnd.

A company doesn't have to offer a bonus or incentive at all. You're fortunate that they are willing to profitshare with you and yes, they do have the right to define how their profitsharing program will work.

That doesn't mean they can change the structure after you met the goal, and finagle a way to not give it to you, but if that's how ithe program has been, it is what it is!