Boosting French company legal representative salaries
In France, there are quite a few ways legal representatives and managers can influence their salary. What are they?
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The social mandate
A “social mandate” is what describes a manager running his company. Depending on the legal status of your company, the manager will either be considered to be a “non-salaried worker” or an “assimilated employee”. In general, Non-salaried worker pay less taxes on their direct remuneration, so you should keep that in mind!
This means, for example, that if you own more than 50% of the company’s shares, having an SARL is more advantageous than having an SAS.
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Dividends
As the manager, you can also decide to be paid with dividends rather than receiving a salary. In this case, it’s generally the opposite: an SAS is taxed less than an SARL. As such, if your remuneration is your main criteria for choosing your legal status, you want to consider how you would rather be paid.
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State subsidies and tax credits
There are actually quite a few tax credits meant to help companies and legal representatives. For example, the ACCRE can allow you to pay fewer taxes for the first 12 months of activity, while the CICE allows you to pay fewer taxes on the salaries that are less than 2.5 times the minimum wage.
If you’re interested, here’s a list of tax credits for company creators in France.
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Taxing your company profit under the Income tax
If you’ve got an SARL or an SAS, under certain conditions, it’s possible to have your company taxed under the income tax rather than the corporate tax.
This can be very advantageous, especially if you don’t pay too much income tax. If you want to learn more, here’s a detailed account of the differences between income tax and corporate tax.
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Indirect remuneration
Whenever the manager has expenses to pay because of his activity, it’s possible to have the company pay these expenses back. This is only possible as long as these expenses were paid for the benefit of the company, as long as you have a receipt proving this expense, and if the company pays you back this amount exactly.
By doing this, as far as the tax system is concerned, the company will have had more expenses during this time. As a result, these expenses become tax-deductible.
In other words, this allows you to reduce the taxes paid by the company without paying more taxes yourself.
