You own an s.r.o. and want to take money out. As a salary, or as a dividend from the profit? Enter what the company can spend on you in a year and compare what reaches you. Nothing is sent to us.
As a salary
Reaches you–
As a dividend
Reaches you–
How it is calculated
Salary: the company money pays your gross salary plus the company's 24.8% social security and 9% health insurance. A salary is a cost for the company, so no corporate income tax is due on it. From the gross salary you pay 7.1% social security, 4.5% health insurance and income tax, minus the basic tax credit (with a signed tax declaration, no other credits).
Dividend: the same money stays in the company as profit. The company pays 21% corporate income tax, then 15% withholding tax on the dividend. Dividends carry no social security, so they build no Czech pension. If you have no other income or insurance in the Czech Republic, you pay public health insurance yourself as a person without taxable income, on the minimum wage.
A salary also counts for a mortgage, a visa or residence permit and sick pay; a dividend can only be paid once the accounts for the year are closed and there is profit to share. Many owners combine the two. The best mix depends on your residence, pension plans and other income. Not included: social security limits for very high salaries, other tax credits, and owners who live abroad (the double tax treaty decides there).
Official sources
Income Tax Act 586/1992 Sb. (§ 6, § 21, § 36); Public Health Insurance Act 592/1992 Sb. (§ 3c); financnisprava.cz.
