Salary or Dividend: How an Owner Takes Money Out of a Serbian Company

The company is doing well, there is money in the account, and now the question we hear from almost every owner: how do I take money out of the company without paying more than I must? The two basic channels are salary and dividend, and it is almost never irrelevant which one you use and in what ratio.

Channel 1: salary

An owner employed in their own company receives a salary like any employee: income tax and social security contributions apply. It is the most expensive channel per unit paid out, but it carries value a dividend does not: pensionable service, health insurance, creditworthiness and a regular monthly inflow. Salary is also a company expense, reducing the corporate income tax base.

Channel 2: dividend

A dividend is paid out of profit, after corporate income tax, at the 15% capital income tax rate, without contributions. Per unit it is therefore often cheaper than salary, but it has its rules: it is paid only from determined and adopted profit, with a distribution decision and prior losses covered.

Why the answer is almost always a combination

• Dividend only means no salary, no pensionable service or insurance on that basis, and money waiting for the annual accounts instead of arriving monthly.
• Salary only means pulling all money through the most expensive channel, with contributions on every dinar.
• A combination usually wins: a sensible monthly salary for status, service and liquidity, plus dividends from profit for the rest. The exact ratio depends on profit levels, plans and the owner's personal situation.

What else to watch

• Owner loans are not profit distribution. Taking money out of the company outside salary and dividend has its own tax treatment and is often the first item an inspection looks at.
• A non-resident owner. Payments to a foreign owner also involve withholding tax and double taxation treaties.

Let us calculate your optimal ratio

This is a classic tax consulting task: we take your profit, plans and situation, and compare the options in dinars. Book a conversation or send us a message, and before the next payout you will know exactly which channel to use and why.