The Difference Between Drawing a Salary from my Company and Paying Out Dividends

All, Finance

October 17, 2023

Being an owner of a company, there will come a time when there is a need to decide how to remunerate yourself so that you can reap the benefits of your profits. There are a few ways to do so, but each having its own pros and cons. You can either draw out your own salary, pay out dividends or do a combination of both. Even though it may seem that either method would give you directly what your company earns, that is not always the case as each method serves to have some sort of compensation or tax scheme that may influence your decision.

Drawing a salary

One way of remuneration of a director in a company is through drawing a salary and paying yourself. When drawing a salary, you are liable to paying personal income tax, which is dependent on your income bracket.

Posts Same Category

All

October 17, 2023

Are Electronic Signatures Legally Binding in Singapore?

An electronic signature is one that allows someone to sign documents digitally as an alternative to using the traditional handwritten method. This serves as a quicker and more convenient method of agreement and saves the trouble and mess with masses of physically printed out documents. In today’s day and age where going digital and online […]

All

October 17, 2023

How do I Raise Funds? What Avenues are Available to Me? What Are the Different Types of Investors?

Money is the key to any business. Without sufficient funds, it is easy for a business to fall into a downward spiral of negative consequences. The biggest reason for many small startups failing each year stems from the lack of funding or capital, as these are essential in sustaining a business and generating revenue. Hence […]

All

October 17, 2023

Should I Run My Business as a Sole Proprietor, Partnership or Private Limited?

A sole proprietor business is one that is owned and controlled solely by an individual. It does not provide as a separate legal entity from the owner, and the owner has unlimited liability over the business. This means that the business can sue or be sued in the sole proprietor’s name. The owner is personally […]

All

October 17, 2023

What are the Roles and Responsibilities of a Company Secretary?

According to the Accounting and Corporate Regulatory Authority (ACRA), it is compulsory for every company to appoint a company secretary within 6 months from its incorporation date, who must be a person locally resident in Singapore. This position in the company cannot be vacant for more than 6 months at any time. A company secretary […]