Running a limited company in Ireland gives you a lot of flexibility, but figuring out how to pay yourself as a company director can feel like walking through a tax minefield.

If you're not sure whether to take a salary, dividends, or how much to actually pay yourself each month, this guide is for you.

Let’s break it down in plain English.

Why it matters

One of the biggest mistakes small business owners make is not having a clear director pay strategy. And without one, it’s easy to:

• Overpay tax (on income, PRSI, or USC)

• Create cash flow problems in your company

• End up confused at year-end with surprise liabilities

Here’s how to do it smarter.

Option 1: Paying Yourself a Director’s Salary

Most directors choose to pay themselves a salary through payroll.

✅ Pros:

• You get a consistent monthly income

• You build up PRSI contributions (important for pensions and benefits)

• It’s tax-deductible for the company

❌ Cons:

• You’ll pay PAYE, PRSI, and USC on your salary

• If your salary is too high, you could push yourself into a higher tax band

TIP: For many directors, keeping your salary just below the standard rate band (€44,000 for a single person in 2025) helps minimise personal tax while keeping you compliant.

Option 2: Taking Dividends from Company Profits

Dividends are paid from post-tax profits, what’s left after your Corporation Tax is paid.

✅ Pros:

• No PRSI or USC on dividends (only Income Tax)

• Often more tax-efficient than salary, especially for higher income

❌ Cons:

• You can only pay dividends if the company has a profit

• Dividends aren’t deductible for Corporation Tax

• No PRSI means no social welfare cover

TIP: Dividends work best when combined with a modest salary. That way, you cover your PRSI and still take advantage of the lower tax on profits.

If you're unsure how this affects your tax bill, make sure you're also setting aside enough each month.
Here's how much you should be saving for tax to stay ahead.

Salary vs. Dividends – What’s the Best Mix?

The answer? It depends on your revenue, expenses, and cash flow.

But in general, a blended approach is the most tax-efficient way to pay yourself from a limited company in Ireland:

• Salary: €10,000–€40,000/year

• Dividends: From leftover profit

• Reimbursements: Business expenses only

Want an exact breakdown for your company? Book a free call.

Or if you're worried about getting hit with a big unexpected tax bill, check out this guide:
How to avoid a surprise tax bill as a limited company

What NOT to Do

Many directors make one of these common mistakes:

🚫 Using the company debit card for personal spending → This creates a director’s loan, which has strict tax rules.

🚫 Taking money randomly without documentation → Revenue sees this as income and you could be taxed heavily.

🚫 Paying too much too soon → Leaving your company without enough cash to cover VAT, PAYE, or Corporation Tax can lead to disaster.

TIP: Always plan your pay with cash flow and tax obligations in mind.

Final Thoughts: Pay Yourself Right (and Stress Less)

Paying yourself from a limited company in Ireland doesn’t have to be confusing.

With the right mix of salary and dividends and a bit of forward planning, you can stay compliant, reduce tax, and avoid cash flow headaches.