{"id":1030,"date":"2020-12-30T07:00:43","date_gmt":"2020-12-30T06:00:43","guid":{"rendered":"https:\/\/vwg.nl\/uncategorized\/salaris-of-dividend\/"},"modified":"2026-03-03T10:33:56","modified_gmt":"2026-03-03T09:33:56","slug":"salary-or-dividend","status":"publish","type":"post","link":"https:\/\/vwg.nl\/en\/salaris-of-dividend\/","title":{"rendered":"Salary or dividend?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8701\" src=\"https:\/\/vwg.nl\/wp-content\/uploads\/20201229_Salaris-of-dividend.jpg\" alt=\"\" width=\"1200\" height=\"628\" \/><\/p>\n<p>A director and major shareholder (DGA) can withdraw funds from their private limited company in the form of a salary or a dividend. Which of the two is the most advantageous in 2021?<\/p>\n<h4>Usual wage<\/h4>\n<p>Before we answer that question, we should note that the director-major shareholder\u2019s salary must comply with the standard remuneration scheme. This also applies to the director-major shareholder\u2019s tax partner, if they also work for the private limited company.<\/p>\n<p>In principle, the director-major shareholder\u2019s gross annual salary must be at least \u20ac47,000 (in 2020, this was still \u20ac46,000). However, if it is higher than that, the salary must amount to:<\/p>\n<ul>\n<li>75% of wages from the most comparable employment;<\/li>\n<li>the highest salary paid to \u201cordinary\u201d employees of the private limited company (or its affiliated entities).<\/li>\n<\/ul>\n<h4>Salary<\/h4>\n<p>The salary paid by the private limited company is deductible as a labour cost from the profit on which corporation tax is payable. For the director and major shareholder, the salary is subject to income tax under Box 1 (income from employment and property).<\/p>\n<p>Income in box 1 is subject to income tax at a rate of 49.5%. This rate applies to income above \u20ac68,507. Up to that amount, a rate of 37.1% applies.<\/p>\n<p>In addition to income tax, an income-related contribution under the Health Insurance Act is payable. This amounts to 5.75% and is payable on income up to \u20ac58,311.<\/p>\n<p>The combined levy at the low rate amounts to 37.1% + 5.75% = <strong>42,85%<\/strong>. And given the high rate at <strong>49,5%<\/strong>. Unfortunately, however, it\u2019s a bit more complicated than that. For incomes falling within the lower tax bracket, the general tax credit (AHK) and the employed person\u2019s tax credit (AK) decrease as income rises. As a result, the effective tax rate is higher than the 42.85% calculated above.<\/p>\n<h4>Dividend<\/h4>\n<p>Dividends are not deductible from the BV\u2019s profits. For the director and major shareholder (DGA), dividends are subject to income tax in Box 2 (income from a substantial interest). The rate in Box 2 is 26.9%.<\/p>\n<p>As the dividend is not tax-deductible, corporation tax is payable on it. This amounts to 15%. Profit after tax amounts to 85%. This amount is distributed and is then subject to income tax: 26.9% * 85% = 22.865%. The total tax burden on the dividend is therefore: 15% * 22.865% = <strong>37,865%<\/strong>.<\/p>\n<p>The BV is liable for corporation tax at a rate of 25% on profits in excess of \u20ac245,000. The income tax payable is therefore: 26.9% * 75% = 20.175%. The total tax burden on the dividend is therefore: 25% + 20.175% = <strong>45,175%<\/strong>.<\/p>\n<h4>Conclusion<\/h4>\n<p>What does all this fiddling with figures actually achieve? The conclusion seems to be that, up to the income level on which the low rate is payable in Box 1 (\u20ac68,507), a salary is more advantageous than a dividend. However, due to the income-dependent phasing out of the AHK and the AK, this tipping point is much lower: at around \u20ac25,000.<\/p>\n<p>From as little as \u20ac25,000, receiving dividends is more tax-efficient than a salary (please note the \u2018usual wage\u2019 rule). And this analysis does not yet take into account any potential effects on healthcare, rent and childcare allowances.<\/p>","protected":false},"excerpt":{"rendered":"<p>Een directeur-grootaandeelhouder (DGA) kan middelen aan zijn BV onttrekken in de vorm van salaris en dividend. Welke van de twee is in 2021 het interessantst? Gebruikelijk loon Voordat we die vraag beantwoorden, moeten we opmerken dat het salaris van de DGA moet voldoen aan de gebruikelijk loonregeling. Dat geldt ook voor de fiscaal partner van [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1030","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/1030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/comments?post=1030"}],"version-history":[{"count":0,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/1030\/revisions"}],"wp:attachment":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/media?parent=1030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/categories?post=1030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/tags?post=1030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}