Is there any Differences between Director Fees and Director Salaries?

Director fees and salaries
Business / Tax

Is there any Differences between Director Fees and Director Salaries?

From a tax perspective in Ireland the answers is no, and must be treated in the exact same manner.

Payment of Director Fees

Fees paid to directors in their capacity as office holders, are chargeable to tax under Schedule E and subject to deductions at source under the PAYE system. Where a company makes a payment to a director and, at the time of the making of the payment, the company is unable to establish by way of documentary evidence at that time that the payment is something other than in the nature of remuneration arising from the directorship, then such a payment is paid to the director in his or her capacity as an office holder and is subject to deductions under the PAYE system.


A director is in receipt of payments from a company amounting to €48,000 annually, paid monthly. The company state that the payments are “payments on account” to cover travel and subsistence, payments made by the director on behalf of the company, director’s loan payments and remuneration. They reconcile the director’s current account at the end of the year when preparing the annual accounts. As these payments are made to the director in his or her capacity as an office holder, deductions under the PAYE system must be made by the company on the making of the payments.

Non-resident Directors of Irish Incorporated Companies

The Schedule E charge to Irish Income Tax on the remuneration arises irrespective of where the holder of that public office is tax resident or where the duties of that public office are exercised (USC also applies). Therefore, where a non-resident individual holds the public office of director of an Irish incorporated company, his or her remuneration from that office is within the charge to Irish income tax under Schedule E. Such income is within the scope of deduction at source of income tax under the Pay as You Earn (PAYE) system and deduction at source of the USC under the USC system. In some instances, such charge to Irish Income Tax may be relieved under the terms of a double taxation agreement. However, it is a matter for the relevant director to satisfy the Revenue Commissioners that relief under a relevant double taxation agreement is appropriate.

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