All expenses > Director’s compensation

Director’s compensation

Tax audit risk

Easiness to justify

Frequency1x per month

Deducted by95% of independentsRecommended by0% of independentsDo you deduct this expense?Would you recommend this expense?

The company director’s remuneration is fully deductible.

When your company, a BV, SRL, NV, SA, or any other form of legal entity, pays its director (you), it is a deductible expense.

This remuneration will be 100% deductible.

Withholding tax and social security contributions

The director’s compensation will be subject to withholding tax, which will generally be declared (on FinProf) and paid by the company (full details here on the SPF/FOD website). The amount of the withholding tax depends on your personal situation (status, dependent children, etc.).

As a director, you therefore generally receive a ‘net’ remuneration: you will no longer have to pay tax on this remuneration.

As a director again, like all independents, you are also required to pay social contributions, which are calculated on the basis of your remuneration as an executive.

Pay slip

Directors’ compensation should be the subject of a 281.20 form, which must be submitted to Belcotax-on-web by 1 March of the following year at the latest.

What if you are a natural person?

If you are a self-employed natural person (eenmanszaak / personne physique) and you transfer yourself money (by bank transfer, for example), this does not count as a business expense: you are not dealing with two separate entities. It is merely a transfer of funds.

As a natural person, you cannot “pay yourself a salary”, at least from an accounting point of view. It makes no sense.

That said, you can of course transfer funds to another bank account, without the slightest worry 😉.

Koen MasscheleinAccountant and CEO Makofisc

Expert’s advice ✨

Directors' remuneration is probably the least tax-efficient form of compensation. If you are a director and shareholder of an SRL that has cash and is making a profit, consider paying yourself dividends: they will be taxed at 20 or 25% (corporation tax) and then subsequently at 15% or 30% depending on certain conditions (see here for more details). This will generally be less than the progressive rate for professional income. To qualify for the reduced rate of corporation tax at 20%, among 5 other conditions, you must pay yourself a director's fee of min. €45,000 a year. Only the 1st tranche of 100,000€ of profit will be taxed at this reduced rate. To qualify for the reduced rate of withholding tax on dividends (15%), you will need to meet certain conditions relating to the company's capital and, above all, wait until the 3rd tax year. You must therefore be able to wait to benefit from this lower rate of taxation.

NEXT UP