As soon as you convert your sole trader business into a limited company (bv), a great deal changes from a tax perspective. One of the most important new obligations is the customary salary: the Dutch Tax and Customs Administration (Belastingdienst) requires you, as a director-major shareholder (dga), to pay yourself a salary that reflects the work you carry out for the company. But how much is that exactly, and how should you handle it?
What exactly is the customary salary?
The customary salary is a statutory standard that prevents directors-major shareholders from deliberately paying themselves a low salary in order to reduce their tax bill. As both shareholder and director of your own limited company, you are in fact employed by your own company. The Tax and Customs Administration wants to prevent you from avoiding tax simply by drawing little salary and instead taking profit through dividends or loans.
The customary salary applies specifically to the director-major shareholder who holds a substantial interest in the company. In most cases, this means you own 5% or more of the shares. If that applies to you, the customary salary scheme applies to you.
How much is the customary salary in 2026?
The Tax and Customs Administration applies a minimum standard. In 2026, the customary salary is at least €56,000 per year. However, bear in mind that this is a floor, not a default figure. You must pay yourself the highest of the following three amounts:
- 75% of the salary in the most comparable employment
- The salary of the highest-paid employee within your company
- €56,000 (the statutory minimum amount for 2026)
In practice, this means that as a specialist or entrepreneur in a lucrative sector, you will quickly need to exceed that minimum. A software architect who previously earned €150,000 per year as a freelancer would have difficulty arguing that a market-rate salary is €56,000.
What changes compared to being a sole trader?
As a sole trader, you had no customary salary obligation. Your profit was your income, and you paid income tax on the balance after deducting business allowances. With a limited company, things work differently. The company pays corporation tax on its profit, and you as director-major shareholder pay income tax on your salary. Only when you distribute a dividend do you also pay substantial-interest tax (box 2).
This system can be tax-efficient, but it does require a sound administrative structure. Your administration must be in order from day one, so that payroll processing runs correctly and you do not risk penalties or back-payments.
Can you use a lower customary salary?
In certain situations it is possible to deviate from the standard norm, but this requires agreement with the Tax and Customs Administration. Consider situations where the company is still in its start-up phase and does not have sufficient liquidity to pay a full salary. In such cases you can apply for a lower salary, but this is not automatically permitted and must be properly substantiated.
Plan een vrijblijvend gesprek en ontdek wat we voor je kunnen betekenen.
Plan een gesprekPractical situations in which a deviation may be open for discussion:
- The company makes a loss in its early years or has limited liquidity
- You work part-time for the company and have other sources of income alongside it
- No comparable role can be found in the labour market
- You can demonstrate that the market-rate salary is demonstrably lower
Always consult an adviser before making decisions on this matter. Every situation is different, and an incorrect assessment can lead to substantial back-payments.
What about payroll taxes?
As soon as you pay yourself a salary from the company, you also become an employer. This means that the company must withhold and remit payroll taxes. These include wage tax, national insurance contributions, and in some cases employee insurance contributions. Whether you as a director-major shareholder are compulsorily insured under the employee insurance schemes depends on the actual authority structure within the company.
A proper payroll administration is therefore not a luxury but a requirement. Are you considering making the move to a limited company? Then first read more about everything that entails via converting a sole trader to a limited company.
Customary salary and dividends: how do you combine them wisely?
Many directors-major shareholders opt for a combination of salary and dividends. Salary falls within box 1 and is taxed at the progressive rate. Dividends fall within box 2 and are taxed at a lower, fixed rate. By keeping the salary no higher than necessary and distributing the remaining profit as dividends, you can optimise the overall tax burden.
But here too, the Tax and Customs Administration keeps a close eye on things. A salary that is too low combined with high dividend distributions is a classic trigger for a tax audit. Make sure your choices are always well substantiated and properly documented.
Would you like to know which mix is most advantageous for your situation? Then a conversation with a tax adviser is a logical first step.
Why Belastingadviseur Eindhoven
The transition from sole trader to limited company is more than an administrative formality. It directly affects your income, your tax burden, and your obligations as an employer. At Belastingadviseur Eindhoven, we help entrepreneurs in the region every day with precisely these kinds of questions: from determining a defensible customary salary to setting up a watertight payroll administration.
Do you have questions about your specific situation, or would you like to know whether your current salary is realistic? Please feel free to contact us without obligation. We are happy to think things through with you.
Frequently asked questions
What is the minimum customary salary in 2026?
In 2026, the statutory minimum amount for the customary salary is €56,000 per year. You must pay yourself the highest of this minimum, 75% of the salary in a comparable role, or the salary of the highest-paid employee in your company.
Do I have to pay a customary salary immediately after converting?
Yes, as soon as the limited company has been incorporated and you are working for it as a director-major shareholder, the customary salary obligation applies. Exceptions may be possible during the start-up phase, but these require agreement with the Tax and Customs Administration.
Can I set the customary salary lower than €56,000?
This is possible in certain circumstances, but only with proper substantiation and preferably after consulting the Tax and Customs Administration or your tax adviser. Consider situations involving insufficient liquidity or a demonstrably lower market-rate salary.
How does the customary salary relate to dividends?
Salary is taxed in box 1 (progressive rate), dividends in box 2 (fixed rate). Many directors-major shareholders combine both in order to optimise their tax burden. The Tax and Customs Administration checks whether the salary meets the customary salary standard before dividends are distributed.
We are happy to think along with you. For advice tailored to your situation we would gladly sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
