How much should you pay yourself as a company director?

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Are you managing your own company (SRL or BV) in Belgium? A common question for self-employed directors is how to determine an appropriate salary. While the flexibility to set your own remuneration is an advantage, it requires careful consideration of tax obligations and financial planning. Paying yourself a higher salary increases personal income tax and social security contributions, whereas a lower salary could restrict access to certain tax benefits.

In this article, we’ll provide guidance on recommended remuneration levels, explore relevant tax incentives, and outline strategies for efficiently extracting profits from your own company.

What's the recommended salary for company directors?

As a company director, setting your own salary is in your hands—but it’s not a decision to be made lightly.

To figure out the right amount, you'll need to map out a financial plan for the next 3 to 5 years. This is where a chartered accountant comes in handy to help you crunch the numbers.

But remember: the higher your salary as a company director, the more you’ll pay in social security contributions and personal income tax. So, it’s all about finding that sweet spot between a fair income and tax efficiency.

A gross annual salary of €45,000 serves as an important benchmark for SRL/BV directors. It strikes a balance between ensuring a reasonable income and optimising tax efficiency. This remuneration can include:

• Directors' fees (tantièmes/loon)
• Taxable benefits, such as company cars or phones (ATN/VAA)

Why €45,000?

You might be wondering why €45,000 is considered the sweet spot.

Companies with a director’s salary of at least €45,000 can access a reduced corporate tax rate of 20% on the first €100,000 of profits.

Profits beyond €100,000 are taxed at the standard 25% rate.

Note: only small companies qualify for this reduced rate under Article 1:24, §§1-6 of the Belgian Companies and Associations Code (CSA).

Is my company eligible for the reduced corporate tax rate?

To benefit from the 20% corporate tax rate on the first €100,000 of profits, the following conditions must be met:

1. Director’s remuneration and taxable income

• The company director's remuneration is equal to the company's taxable income. For example, the company’s taxable income is €30,000, the director’s remuneration must match this amount.
• If profits exceed €45,000, setting a salary at or above €45,000 is sufficient.

2. Newly created companies

Newly established SRL/BV companies enjoy the reduced rate for their first 4 fiscal years. However, if transitioning from a sole proprietorship to an SRL/BV, the clock starts from the sole proprietorship's creation date.

3. Requirements for small companies

• The company must meet the criteria defined in Article 1:24, §§1-6 CSA.
• At least 50% of shareholders must be natural persons.
• The company must not function as a financial entity with shareholdings exceeding 50% of its released capital, reserves, and gains.

Extracting funds from your SRL/BV

Beyond a salary, company directors can also distribute profits through dividends, directors’ fees, or liquidation reserves. Each option has distinct tax implications:

1. Dividends and directors' fees

• Dividends
  As income from movable property, dividends are taxed at a 30% withholding tax but are exempt from social security contributions.
  
  Reduced withholding tax rates for small companies:
  For dividends from shares issued after 1 July 2013 (fully paid in cash and held continuously):
  • 30% in the first and second fiscal year after issuance
  • 20% in the third fiscal year
  • 15% from the fourth fiscal year onward
    
• Directors’ fees
  Distributed as a share of profits at the Annual General Meeting, directors’ fees are subject to both personal income tax and social security contributions.
  
  These are the key conditions for dividends and director's fees:
  • Net assets test: Distributions must not reduce the company’s net assets below zero.
  • Liquidity test: The company must remain capable of meeting its financial obligations post-distribution.

The federal government plans to raise the VVPR-Bis rate from 15% to 18% via the new programme law, at the earliest from 1 June 2026. Until the law is published, the current rate remains in force.

2. Liquidation reserves

A liquidation reserve is one of the most tax-efficient ways to extract profits from your SRL/BV. Companies can allocate part of their profits to this reserve, which is initially taxed at 10% in addition to the standard corporate tax rate.

Since 1 July 2025, you can already distribute this reserve after three years at a withholding tax rate of 6.5%. For the classic five-year waiting period, the rate is just 5%. Upon liquidation of the company, no further withholding tax is due at all — only the original 10% levy.

Example: a liquidation reserve created for the 2024 fiscal year can be distributed at the reduced rate of 6.5% from 1 January 2028, or at 5% from 1 January 2030. This is significantly more advantageous than the standard 30% withholding tax on dividends.

For liquidation reserves constituted from 31 December 2025, the government plans to raise the withholding tax after 3 years from 6.5% to 9.8% (total tax burden: 18%). Existing reserves remain subject to the current regime.

Tips to optimise your salary as a company director

To determine how much salary you should give yourself as a company director, keep the following points in mind:

1. Salary is typically the most heavily taxed form of income. Pay yourself what you need for daily living expenses, but avoid excessive salary payments.
2. If your company qualifies for the reduced corporate tax rate, aim to pay yourself at least €45,000 annually, to lower your tax rate on the first €100,000 of profits.
3. Consider building a liquidation reserve for future profit distributions at minimal tax rates.

By strategically managing your remuneration and profit distributions, you can optimise tax efficiency while ensuring compliance with Belgian corporate regulations.

💡Did you know you can use Accountable for your BV/SRL? Simply scan your invoices and expenses, invite your accountant, and effortlessly stay on top of your finances. Try Accountable now for free.

Author - Alexis Eggermont

Alexis is co-founder at Accountable. He is passionate about leveraging data, AI, technology, and entrepreneurship.

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