Calculate the optimal split between salary and dividends for your company director package. See your personal take-home and company position side by side. 2026 rates.
Most Irish company directors use a combination of salary and dividends to take money from their company. The optimal split depends on your personal tax situation, pension needs, and company profit level.
A salary paid to a director is a deductible expense for Corporation Tax purposes. It is subject to PAYE, USC, and PRSI (Class S for proprietary directors with 15%+ shareholding). Salary earns PRSI contribution records, which count toward the State Contributory Pension and other PRSI benefits. Most directors set their salary at or below the standard rate band (€44,000 in 2026) to avoid the 40% tax rate.
Dividends are paid from the company’s after-tax profits (after Corporation Tax at 12.5%). Dividend Withholding Tax (DWT) at 25% is deducted at source and remitted to Revenue. Dividends do not attract employee or employer PRSI — which reduces the immediate cost but means no PRSI contribution record. Higher-rate taxpayers may owe additional income tax on dividends via their annual Form 11 return.
Employer pension contributions paid by the company are a deductible business expense and not treated as BIK (Benefit in Kind) for the director. Pension contributions reduce taxable income and are one of the most tax-efficient ways for a director to extract value from a company while building long-term wealth.
For most directors, taking a salary up to the standard rate band (€44,000 in 2026 for a single person) and supplementing with dividends is tax-efficient. However, the best structure depends on your pension contribution capacity, whether you need State Pension contributions, company profit levels, and whether you are married. A qualified accountant can model your specific scenario.
DWT is a 25% tax deducted from dividends by the company before payment to the shareholder. The DWT is a prepayment of income tax — not an additional tax. Standard-rate taxpayers may be entitled to a refund if the DWT exceeds their income tax liability. Higher-rate taxpayers may owe additional tax on dividends via their Form 11 annual return.