Salary, bonus, dividend or company pension: which route actually delivers for a shareholder-managing director
Mikhail Iankovski, M.Sc.
Published in August 2026
Reading time 8 min
A good financial year, profit in the GmbH, and the question is on the table: how does the money get to you as shareholder-managing director? Four routes are open: a pay rise, a profit bonus (German: Tantieme), a dividend and a company pension promise. Each route has a different tax mechanism, a different time horizon and different tests at the tax office. This article sorts all four, with the 2026 tax rates and the question of what role each route plays in the overall concept.
Route 1: the pay rise, simple and permanently progressive
The pay rise is the most direct route. It reduces the GmbH's profit as a business expense and reaches the managing director as current income. There, the progressive scale applies: in 2026, the top rate of 42 % starts at 69,879 euros of taxable income, and from 277,826 euros it is 45 % (§ 32a EStG). A controlling shareholder-managing director generally pays no social insurance contributions on the salary, but also builds up no statutory entitlements. Why that sharpens the pension question is set out in the article on retirement planning for shareholder-managing directors.
Two properties limit the route. First, the rise is permanent: a fixed salary, once increased, is hard to lower again, and the GmbH ties itself to fixed costs. Second, the tax office tests the appropriateness of the total remuneration. Anything beyond what an external managing director would earn in a comparable position risks being classified as a hidden profit distribution.
Route 2: the profit bonus, flexible but with clear rules
The bonus links remuneration to performance. More flows in good years, less in weak ones, and the GmbH avoids permanent fixed costs. For the recipient, the tax picture does not change: the bonus is current income and subject to the same progressive scale as the salary.
With a shareholder-managing director, the tax office looks more closely. The agreement must be made in advance, clearly worded and legally effective; a bonus resolved retroactively for a year that has already run does not stand up. As a guide from the case law, the total remuneration should split into at least 75 % fixed salary and at most 25 % bonus. Anyone departing from these benchmarks needs good, documented reasons. The tests resemble those I have described in the article on the tax recognition of pension promises: the tax office always asks whether an unrelated third party would have received the same agreement.
Route 3: the dividend, taxed twice
The dividend looks elegant at first glance: no salary, no progression, a flat tax. But the calculation starts one level earlier. The distributed profit has already borne corporation tax of currently 15 % (§ 23 KStG) and trade tax depending on the municipal multiplier at company level, together often around 30 %. Unlike salary, bonus or pension contribution, the dividend does not reduce the profit. What then flows out is generally subject to the flat withholding tax of 25 % plus solidarity surcharge (§ 32d EStG).
In many situations, less of the original profit remains than with the deductible remuneration routes. That does not make the dividend wrong: it is the proper way to draw investment income from the shareholder role, independent of the work as managing director. As an instrument of ongoing remuneration, however, it is rarely the first choice. A detail for planning: under current law, the corporation tax rate falls in steps from 15 % to 10 % between 2028 and 2032 (§ 23 KStG), which shifts the calculation over the years. The actual burden in the individual case is for the tax advisor to compute.
Route 4: the company pension promise, money sent ahead in time
The fourth route does not take the money out of the GmbH today but sends it ahead into retirement. The GmbH grants a pension promise and funds it, for a higher retirement target typically through the reinsured Unterstützungskasse. The contributions reduce the profit as a business expense (§ 4d EStG), and no taxable income accrues to the managing director today. Only the later benefits are taxed, as income under § 19 EStG, and depending on the income situation in retirement often at a lower personal rate than in the peak earning years.
The price is the lock-in: the funds are not available before the pension event, and the contributions demand a stable earnings position. I have set out these limits openly in the article on the drawbacks of the Unterstützungskasse. Anyone who knows and plans for them gets the only one of the four routes where the gross amount works for their own provision undiminished.
| Route | Tax for the director today | Effect at the GmbH | Typical role |
|---|---|---|---|
| Pay rise | Progressive up to 42/45 % | Business expense, permanent fixed costs | Current standard of living |
| Profit bonus | Progressive up to 42/45 % | Business expense, rises and falls with performance | Performance share with clear rules |
| Dividend | 25 % plus surcharge, after the company-level burden | No business expense deduction | Investment income from the shareholder role |
| Pension promise | None today, taxed only in retirement | Business expense (§ 4d EStG) | Provision funded from gross income |
Combination instead of either-or
The four routes do not compete; they answer different questions. The fixed salary carries the standard of living and must pass the appropriateness test. The bonus rewards good years without binding the GmbH permanently. The dividend pays a return on the shareholder role. And the pension promise answers the question the other three stay silent on: what will you live on when you are no longer managing director?
The typical imbalance in practice: the first three routes are in use, the fourth is empty. The money leaves the GmbH entirely through channels taxed immediately, while the pension question is postponed. In tax terms, that is the most expensive way to handle the subject, because provision through the company level is the only route where the full gross amount works. The right weighting between the routes is an individual calculation and belongs on the table together with the tax advisor.
Salary and bonus pay for today and are taxed progressively at once. The dividend carries the double burden of the company and shareholder levels. Only the pension promise moves the gross amount untaxed into retirement provision and shifts taxation into retirement. A well-designed remuneration concept uses all four routes in the right doses, coordinated with the tax advisor.
Frequently asked questions
What does the tax office look at with a profit bonus (Tantieme) for a shareholder-managing director?
The bonus must be agreed in advance, clearly worded and legally effective, otherwise a hidden profit distribution looms. As a guide from the case law, the total remuneration should split into at least 75 % fixed salary and at most 25 % bonus. The total remuneration must also remain appropriate overall. The details should be agreed with the tax advisor.
Why is the dividend often considered the most expensive route for ongoing remuneration?
Because it is taxed on two levels. At company level, corporation tax of currently 15 % and trade tax depending on the municipal multiplier apply, together often around 30 %, and the dividend does not reduce the profit. On the distribution itself, the shareholder generally pays the flat withholding tax of 25 % plus solidarity surcharge. In many situations, less remains than with remuneration routes that are deductible as business expenses. The exact calculation depends on the individual case and is a matter for the tax advisor.
When is the company pension promise the right route?
When the money is not needed for consumption today but should work for retirement provision. The contribution reduces the GmbH's profit as a business expense, no taxable income accrues to the managing director today, and only the later benefits are taxed. In return, the funds are locked in. The prerequisites are a stable earnings position and a cleanly structured promise coordinated with the tax advisor.
Further reading
- The Unterstützungskasse for shareholder-managing directors: balance-sheet-neutral provision beyond the contribution assessment ceiling
- Retirement planning for shareholder-managing directors: which routes carry weight when the state pension falls away
Want to know how the four routes interact in your specific situation? In an initial consultation we sort remuneration, dividend policy and pension provision, as a basis for the calculation with your tax advisor.
This content is general information and no substitute for individual tax or legal advice. Tax structuring is carried out in coordination with the client's tax advisor. Legal bases: § 32a EStG (2026 scale), § 32d EStG, § 23 KStG, § 4d EStG, § 19 EStG.