Optimising your salary

In the Netherlands, a director/majority shareholder (Dutch acronym: DGA) is usually paid a salary by their own company. This salary has been capped at:

• 75% of the pay of the most comparable position; or
• the highest salary paid to the other employees of the company or its affiliated entity; or
• € 45,000.

We recommend that you check whether your salary is still tax-efficient. If you have received the same salary for some years, you should probably have it adjusted.

In 2020, the rate of personal income tax on a salary of up to € 68,507 will be 37.10%. It may be tax-efficient to adjust your salary accordingly. If you want to draw more money from your company, you could consider distributing a dividend. By distributing a dividend in 2019, you can benefit from the lower substantial interest rate in 2019. Please note: a dividend distribution will cause your taxable income from savings and investments (Box 3) to increase, which may raise your personal income tax liability.

Interested in finding out whether it would be tax-efficient for you to optimise your salary? Please contact your Accon International tax adviser to learn more.