Business Owner Salary Vs Dividends. If your business earned 700000 this year you would pay yourself. You can defer taking dividends to another tax year when it is more advantageous if you dont need the money to live on.
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For example perhaps you decide to take 10 of revenue as salary up to 500000 then 15 after. Unlike a salary which counts as personal income dividends are considered investment income. Paying dividends doesnt require personal taxes to be remitted at source.
The business owner will pay a lot let less.
Some key advantages of using this method include. 500000 x 10 700000 500000 x 15 50000 30000 80000. Net Income 228 43750. If your business earned 700000 this year you would pay yourself.
