What is the DGA salary? A guide for shareholders working in their own BV

Once you have formed a BV in the Netherlands and start working in your own company, you will soon run into the term “DGA salary”. For many entrepreneurs from Türkiye it comes as a surprise: owning the company does not leave you free to decide whether to pay yourself a salary. The Dutch tax system expects a shareholder who works in their own company to draw a salary at a given level.

This article explains who counts as a DGA, how the gebruikelijk loon (customary salary) rule works, why it exists, what it means for payroll and tax, and the special position of shareholders living in Türkiye. We do not quote amounts: they are reset every year and must be checked against your own file.

Who is a DGA?

DGA is the Dutch abbreviation of directeur-grootaandeelhouder, literally “director and major shareholder”. In plain terms, a DGA is someone who holds a substantial interest in a BV and also works in that company. The shares may be held directly or through a holding; in that case the DGA is usually the director of the holding, which provides management services to the operating company.

What matters is that two elements coincide: shareholding and work done for the company. An investor who only holds shares and does no work is outside the rule. A shareholder who handles management, sales or projects for their own company is a DGA in the eyes of the Belastingdienst (the Dutch tax authority), even if no salary is currently being paid.

How the gebruikelijk loon rule works

The logic is simple: the salary a DGA receives from their own company may not be noticeably lower than what an independent employee doing the same job would earn. To establish that “customary” salary, the Belastingdienst uses several reference points:

• The market salary of someone in a comparable position with comparable responsibilities.
• The salary of the highest-paid other employee in the company or its affiliated companies.
• A minimum reference amount laid down in law and reset every year.

The level that follows is the floor for the DGA salary. A lower salary is only possible where it can be justified, for instance in a start-up or loss-making phase, and that justification has to be documented and in some cases agreed with the tax authority in advance.

Why does the rule exist? Without the shareholding, every euro you received would be salary subject to wage tax. As a shareholder you could take money out as dividend instead. The rule makes sure the reward for your work is taxed as salary rather than dressed up as dividend.

Payroll, tax and the salary-dividend balance

The DGA salary creates a genuine payroll obligation: the BV registers with the Belastingdienst as an employer, runs payroll every period and files wage tax returns. The salary is a deductible expense that lowers the BV’s profit; the tax withheld at source is credited in the DGA’s personal income tax return.

A DGA’s social security position also differs from a regular employee’s: with sufficient control, the DGA is in most cases not covered by employee insurance schemes. That lowers the contribution burden, but it also means no cover for unemployment or illness. We handle this within the annual compliance calendar of our tax and compliance service.

So, salary or dividend? Salary is deducted as an expense in the company and taxed as personal income. Dividend is first subject to corporate income tax at BV level and then taxed again at shareholder level. Which mix works best depends on your income, the company’s profitability, the structure and your personal needs. Generic advice such as “minimum salary, rest as dividend” can therefore mislead; the right balance follows from a tailored assessment with current rates and your own numbers. For the role of a holding on the structure side, see BV or holding?.

Shareholders living in Türkiye

For shareholders who own a Dutch BV but live in Türkiye, the picture has more layers. The double taxation treaty between Türkiye and the Netherlands governs where and how directors’ fees and dividends are taxed. Where the work is physically performed, where the shareholder is tax resident and which country’s social security system applies all change the outcome.

Whether the customary salary rule applies in that situation, at what level, and how it combines with reporting obligations in Türkiye is a matter for a tailored assessment rather than a general rule. For DGAs considering relocation to the Netherlands, the permit side is covered on our immigration and permits page.

Common mistakes

• Paying no salary at all in the first years without documenting why.
• Making regular payments to the shareholder without a payroll registration.
• Not settling which company pays the salary in a holding plus operating BV structure.
• Working in several BVs without assessing each company separately.
• Having grounds for a lower salary but not raising them with the Belastingdienst in advance.
• Carrying last year’s figure forward without checking the updated reference amounts.

Conclusion

The DGA salary concerns every shareholder who works in their own BV, and ignoring it creates payroll, tax and penalty exposure. Setting the right level and the right salary-dividend balance calls for a tailored assessment with your own numbers. We are glad to discuss your situation in a free 15-minute intro call.