Managing Director Salary vs. Dividend – tax optimization

Managing Directors of GmbHs are regularly faced with the question: Should I pay off the money as a salary or as a dividend? Each variant has different tax consequences and has different effects on social security, pension rights and BAV.

A pure salary leads to full social security contributions, but reduces business and corporate tax. A dividend saves social contributions, but is burdened with withholding tax and possibly solidarity surcharge. Sometimes a combination of minimum salary and dividend is the better choice.

We model different scenarios for managing directors and at the same time take into account BAV, BKV and private pension provision. This creates an overall picture that fits tax and personal.