Director-cum-controlling shareholder’s salary
A statutory obligation applies to directors-cum-controlling shareholders and their spouses in exchange for the work they perform for their private limited-liability company to ensure that the salary they collect should at least amount to
- 75% of the salary from the more or most comparable job, or
- the higher or highest salary earned by the company’s other employees, or
- 46,000 euros per annum,
whichever of these is the greatest.
The private limited-liability company has the option of rendering it plausible that the director-cum-controlling shareholder’s salary should be lower. Allowances may be made for a 25 percent discrepancy compared with the wage from the more of most comparable job provided this does not cause the director-cum-shareholder’s annual wages to drop below 46,000 euros
The customary wage doctrine applies to any private limited-liability company whose director-cum-shareholder (or the latter’s spouse) is the holder of a substantial interest in as well as performing work on behalf of the company in question.
Directors-cum-controlling shareholders whose company’s sales have suffered due to the COVID‑19 situation may apply a wage level that is lower than that as per the statutory regulation. The reduction in question should be proportionate to the sales loss suffered and is calculated by applying the following formula:
Customary wage for 2020 =(customary wage for 2019) x (sales for the first four months in 2020) / (sales for the first four months in 2019)
The legitimate use of the customary wage leeway which is thus being granted makes it essential that the director-cum-controlling shareholder in compensation of settling for a reduced wage should refrain from allowing his or her current-account debt with the company to increase or from collecting dividends from his or her company. Any director-cum-controlling shareholder who is shown to have collected a greater amount in wages than that as per the above calculation can count on having the higher wage taken into consideration. The eased-up scheme will not apply where the sales figures for 2019 or 2020 were, or are being, affected by extraordinary factors of a non-corona crisis related nature.
Dutch version: Het salaris van de dga