Minimum Compensation for Company Managers Rises to 51,000 EUR for the 2027 Tax Year
September 2026 - The minimum compensation that a company manager must receive for a small corporation to qualify for the reduced corporate income tax rate will be 51,000 EUR starting with the 2027 tax year.
This amount applies to fiscal years ending in 2026 or spanning 2026–2027. In addition, the threshold will be indexed annually going forward. So be sure to schedule a tax review in a timely manner!
From 45,000 to 51,000 EUR
Under certain conditions, small companies may benefit from a reduced tax rate of 20 percent on the first 100,000 EUR of profits. One of these conditions is that at least one individual executive must be granted a minimum salary.
For the 2026 tax year, that minimum remuneration amounted to 45,000 EUR. The personal income tax reform of July 15, 2026, raised the base threshold and linked it to annual indexation starting with the 2027 tax year. As a result, the indexed minimum remuneration for the 2027 tax year amounts to 51,000 EUR.
Previously, the figure of 50,000 EUR was often used for 2026. That amount is now outdated. After all, the indexation is applied directly to the new base amount of 25,000 EUR, bringing the effective threshold for the 2027 tax year to 51,000 EUR.
If, as a business owner, you had already adjusted your compensation at the beginning of 2026 to the previously communicated threshold of 50,000 EUR, this is an important point to consider. Be sure to verify that your salary for the entire year is high enough to meet the new indexed requirement.
A lower amount of compensation may also suffice
However, this rule is not absolute. To meet the compensation requirement for the 2027 tax year, you must receive compensation of at least:
51,000 EUR, or
the company’s taxable income, if that amount is less than 51,000 EUR
A company with, for example, a taxable income of 40,000 EUR therefore does not need to pay remuneration of 51,000 EUR to meet this specific requirement. Of course, the other requirements for the reduced tax rate must also be met.
Higher Salary Not Always Tax-Efficient
Higher compensation is not necessarily the most tax-efficient solution. Additional salary is generally taxed at a higher rate than a dividend and also entails social security contributions. The maximum benefit of the reduced rate is 5,000 EUR: on the first 100,000 EUR of profit, 20 percent corporate income tax is due instead of 25 percent.
The decision therefore goes beyond the question of whether you, as a director, can meet the new threshold. Anyone who increases their compensation may be trading part of a more tax-efficient dividend payment for wages that are subject to income tax and social security contributions. The exact difference depends on your personal situation and your company’s financial results.
More Room for Pension Accumulation
A higher salary can also offer advantages. For example, if you participate in an IPT or VAPZ plan, a higher salary can lead to more room for pension accrual.
This means that your compensation should not be viewed solely from the perspective of corporate income tax. Pension planning, social security, and the desired ratio between salary and dividends can also play a role.
Reevaluate Annually
The new regulation also makes compensation planning less static. Because the minimum compensation will now be indexed annually, the required threshold may change again in subsequent tax years.
For small companies, it is therefore advisable not to automatically stick to a historically chosen salary amount. Profit levels, dividend potential, other income, social security contributions, and pension accrual may result in a different optimal choice each year.
