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Paying wages as a self-employed person in main occupation (subject to VAT, sole proprietor)

MP
05/03/2024
Question

Dear Sir/Madam,

This month, I am going to pay myself my first salary as a self-employed person in my main occupation (i.e. transfer an amount from my business account to my personal account).

What tips would you give?
– Keep as much as possible in my business account?
– Is there a guideline percentage of monthly income to pay out as wages?

Thank you!

Milan

Hey! What you earn as a sole proprietor goes directly into your private assets. So there is no distinction between your private assets and your professional income! In principle, you can earn and pay out as much as you want, but you have to add up everything you have invoiced this month, deduct the vAT immediately, because you have to pay that back anyway, and then deduct your professional expenses, such as materials, subscriptions, insurance, (part of) your internet bill, etc.You pay little tax on professional income up to €18,000. That comes to €1,500 per month. If you can pay that to yourself, I would start with that. Anything you earn above that will be subject to taxes, depending on the tax bracket you fall into. You can then use the amount you keep in your professional account to run your company. At the end of the year, you can pay yourself more with the positive balance in your professional account, but you will have to pay tax on it. If you earn more, it is best to make advance payments of taxes.

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You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.

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