How Much Can I Withdraw for My Own Personal Use From My Company?
By OSK
Jun 7, 2006, 13:09

How much can I withdraw for my own personal use from my company?

All monies taken from the company for personal use are treated as net salary. We would generally recommend that you fix your net salary at the start of the year and transfer the same net amount each month from your company’s account to your personal account. When estimating your net salary at the beginning of the year you will need sufficient funds in your company account to cover all business expenses including the income tax and social security due on your salary. Once we have worked out your net salary we would then calculate the income tax and social security due and recommend that you set up a direct debit for this amount to be paid to the Collector General each month.

Where possible, please do not use your company bank account or cheque book for personal expenses – all personal expenses should be paid in the usual way from your personal bank account. At the beginning of your accounts year an estimate of a net salary figure should be calculated as follows:

If you withdraw more than the net salary calculated at the beginning of the year an additional PAYE/PRSI liability will arise, and if this extra liability is more than 20% of your total liability for the year an interest surcharge will arise.

It is therefore, recommended to revise your monthly direct debit to the Revenue, if your circumstances change during the year. For example if your daily charge out rate is amended, if a bonus is received, if the length of your contract changes or if you incur higher expenses than anticipated.

If you wish to make a pension contribution during the year this will also affect your net salary calculation.

Reprinted with kind permission by OSK Contracting.

OSK Contracting provide quality and professional business advice to indigenous Irish businesses. Our clients include government bodies; multi-national groups; PLCs; SMEs and sole traders but we specialise in progressive indigenous Irish family owned businesses.

Reprinted with kind permission by OSK Contracting www.osk.ie

Phone: 01 439 4200 East Point Plaza East Point Dublin 3