Once your business becomes profitable, the next step is deciding how to take money out of the company in the most tax-efficient way. With several options available, choosing the right strategy — or combination — can make a significant difference to your personal finances and long-term goals. Here are some of the most effective approaches:

1. Director’s Salary:

Paying yourself a salary is one of the most straightforward methods. A reasonable salary allows you to benefit from:

• PAYE tax credits

• PRSI entitlements

• Pension contributions

It’s also a deductible expense for the company, making it an efficient option from both sides.

2. Dividends:

If your company has retained profits, issuing dividends can be an attractive route. While dividends are subject to personal tax under self-assessment, they aren’t subject to PRSI, which can lead to lower overall tax compared to salary.

3. Company Pension Contributions:

Your company can make contributions directly into your pension. These are:

• Tax-deductible for the company

• Not a benefit-in-kind for you

This is one of the most powerful long-term wealth-building strategies for directors.

4. Mileage & Subsistence:

If you travel for work purposes, you can be reimbursed using Revenue-approved rates for mileage and subsistence. When properly recorded, these payments are tax-free — a valuable way to cover real costs without triggering a tax liability.

5. Renting a Home Office to the Company:

If you work from home, it may be possible to charge your company market rent for using part of your home as an office. Conditions apply, and it’s important to get this right — but when done correctly, it can create an additional stream of tax-efficient income, especially when paired with allowable expenses.

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