Income of the micro-entrepreneur or the individual entrepreneur
Verified 15 May 2022 - Directorate for Legal and Administrative Information (Prime Minister)
Are you an individual entrepreneur or micro-entrepreneur and want to know how to determine your income?
Micro-entrepreneur
Your remuneration depends on your turnover.
Indeed, it is up to you to determine your income, in relation to the amount you have left after the payment of your taxes, your social contributions and your other monthly obligations (charges related to the premises, suppliers...).
There is no rule, you can decide to pay yourself a fixed remuneration each month or re-calculate your remuneration each month.
Your personal wealth and that of your company are linked. That's why when you want to pay yourself, you can do it when you want without having to do a salary report card.
Your taxes and social security contributions are calculated and deducted from your turnover
Warning
if you want to pay yourself remuneration, you must have a treasury positive.
- You can find the tax ruless concerning micro-entrepreneurs and individual companies on the cards Everything you need to know about company taxation.
- You can also find the rules concerning the social contributions of micro-entrepreneurs and individual companies on the cards Everything you need to know about companies' social contributions.
Sole trader
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Your company is taxed on income tax
Your remuneration depends on your turnover.
Indeed, it is up to you to determine your income, in relation to the amount you have left after the payment of your taxes, your social contributions and your other monthly obligations (charges related to the premises, suppliers...).
There is no rule, you can decide to pay yourself a fixed remuneration or recalculate your remuneration every month.
Your taxes are calculated and levied on your turnover.
Your social security contributions are calculated on the basis of your turnover, and you will then have to make the payments.
Your company is subject to business tax
You're a company manager
Dividends
At the end of the fiscal year, you can determine whether a dividend distribution will occur.
This distribution depends on your company's profits and its needs.
You have to declare the dividends you receive.
They are taxed in the category of income from movable capital.
The dividends you receive are subject to social contributions for the part that exceeds 10% the net profit of your company.
Remuneration
As the head of your company, you can receive a remuneration whose amount you determine.
It exists 3 shapes possible remuneration:
- Fixed remuneration (fixed salary): The amount of remuneration is determined and it is not supposed to move. It may also be fixed in relation to the amount of the salary of an employee of a defined hierarchical level. This amount is equal to x times the amount of this employee's salary
- Proportional remuneration (proportional treatment): the amount of remuneration is proportional to your company's profits or turnover
- Fixed and proportional remuneration : a part is fixed and determined. The other part varies depending on your company's profits or sales
Benefits
In addition to these remuneration may be benefits :
- Benefits in kind : accommodation, car,...
- Reimbursement of expenses : the refund may be a flat-rate refund equal to 10% (tax allowance) or it may be equal to the actual costs
Tax and social arrangements for remuneration
Your compensation is deductible the benefits of your company if it corresponds to a actual work and that it is not excessive in relation to the financial capacity of the company.
Remuneration is income tax in the category of salaries and wages. A flat-rate deduction of 10% or actual professional fees shall be applied.
You have the status of self-employed person, you are under the social security scheme for the self-employed even if you are not paid.
You're not a company manager
At the end of the fiscal year, you can determine whether you will receive dividends.
This dividend distribution depends on your company's profits and its needs.
You have to declare the dividends you receive.
They are taxed in the category of income from movable capital.
The dividends you receive are subject to social contributions for the part that exceeds 10% the net profit of your company.
Warning
if you want to pay yourself remuneration, you must have a treasury positive.
- You can find the tax ruless concerning micro-entrepreneurs and individual companies on the cards Everything you need to know about company taxation.
- You can also find the rules concerning the social contributions of micro-entrepreneurs and individual companies on the cards Everything you need to know about companies' social contributions.