Salary — deductible for the company
The salary you pay yourself is a deductible expense for the company, so it lowers the company’s taxable profit (corporate tax 20%). Salary is taxed as earned income on the progressive scale, and employer side costs are paid on it. Note: most owner-entrepreneurs are YEL-insured, in which case the statutory pension and a large part of social security are based on the YEL income (YEL-työtulo), not on the salary you pay yourself.
Dividend — tax-efficient up to a limit
A dividend is paid from the company’s after-tax profit (the company has already paid 20% corporate tax). From an unlisted company, dividends are taxed lightly up to certain limits:
- Dividend up to 8% of the shares’ mathematical value: up to €150,000, 25% is taxable capital income and 75% is tax-free.
- For the part exceeding €150,000 (within the 8%): 85% is taxable capital income.
- Dividend exceeding 8%: 75% is taxable earned income.
- Capital-income tax is 30% up to €30,000 and 34% above that.
The figures are for 2026. The €150,000 limit is personal and covers all your unlisted-company dividends combined. The mathematical value is calculated from the company’s net assets. Source: vero.fi, June 2026.
What is the mathematical value?
A share’s mathematical value is the company’s net assets (assets minus liabilities) divided by the number of shares. The higher the net assets, the more lightly-taxed dividend you can take within the 8% rule.
Which is better — salary or dividend?
There is no single right answer. The most efficient approach depends on the company’s profit, its net assets, your other income and how much you value accruing pension and social benefits. Often the best solution is a combination.
A practical rule of thumb
- Size the salary to your overall situation — a YEL-insured entrepreneur’s pension accrues from the YEL income, not from salary.
- Use the lightly-taxed dividend within the 8% rule.
- Track net assets yearly — they set the favorable dividend amount.
- Plan your withdrawals in advance with your accountant.
Plan it with us
We calculate a salary/dividend mix that suits your situation, legally — in your language, taking all the conditions into account, so you use the reliefs you’re entitled to and don’t overpay by mistake.
Frequently asked questions
- Is a dividend or salary more advantageous?
- It depends on the company’s profit and net assets and on your other income. A combination is often the most advantageous — we calculate it for you.
- What is the 8% dividend rule?
- From an unlisted company, a dividend up to 8% of the shares’ mathematical value is taxed lightly: up to €150,000, 25% is taxable capital income and 75% is tax-free.
- What is the €150,000 limit?
- It is a personal annual limit for the lightly-taxed dividend and covers all your unlisted-company dividends combined.
- Can I take only dividends?
- You can. A YEL-insured entrepreneur’s statutory pension accrues from the YEL income regardless of salary, but a salary/dividend combination is often more tax-efficient. The best choice depends on your situation.
Need help?
We help with setting up your business, taxes and bookkeeping — in five languages.