If your SH.P.K. has gross income of up to ALL 14 million a year, its profit is not taxed and a dividend pays only 8%. In that case, for amounts above about ALL 936,000 a year, a dividend leaves you more than a salary, even before contributions. Once the company passes ALL 14 million and pays 15% corporate tax, the sums turn around and a salary usually comes out cheaper. Here is why, with figures, and what deadlines each route carries.
Compare the two routes for your amount
Enter how much you want to take each year and the company's gross income. The prefilled figures are this article's example. The comparison covers income tax only.
Salary or dividend: what do you keep?
Income tax only. Contributions are not included.
Company's corporate tax: 0%
As salary
- Gross salary
- ALL 2,400,000
- Tax on salary (13% / 23%)
- ALL 265,200
- You keep
- ALL 2,134,800
As dividend
- Corporate tax (0%)
- ALL 0
- Tax on dividend (8%)
- ALL 192,000
- You keep
- ALL 2,208,000
As a dividend you keep ALL 73,200 more, on income tax alone.
Social and health contributions are not calculated. They are paid on salary, not on dividends, and can change the answer, especially for low salaries.
We assume: this is your only salary for the year, paid monthly through a bank, and you signed the personal status declaration with this company; no child allowance.
Your choices stay on this page and reset on reload. They are not sent to Pivot or the tax authority.
Official source: Law no. 29/2023 on income tax, as amendedHow the owner's salary is taxed
Albania's income tax law treats directors' pay, and payments a company makes to its partner for work done for it, as employment income. The ministry's instruction adds that when the partner is employed under the Labour Code and paid monthly, the salary is taxed through payroll at the progressive rates.
The calculation has two steps. First, the personal deduction comes off the yearly gross salary: ALL 600,000 when the salary is up to 600,000 a year, ALL 420,000 when it is up to 720,000, and ALL 360,000 when it is higher. Second, 13% applies to what is left up to ALL 2,040,000, and 23% above that.
Illustrative example: the owner takes ALL 200,000 gross a month, so ALL 2,400,000 a year. The deduction is ALL 360,000 and the base ALL 2,040,000. The tax is ALL 265,200 (13%). The owner keeps ALL 2,134,800. For the company the salary is a cost and lowers taxable profit, but only if it is paid through a bank or a licensed electronic money institution.
How a dividend is taxed
A dividend is taxed at 8%, with no costs deducted. The company withholds the tax when it pays the dividend, and that tax is final for you. But a dividend is paid out of profit after tax, because for the company it is not a cost.
This is where the corporate rate comes in. Companies with gross income up to ALL 14 million a year pay 0% until 31 December 2029. Others pay 15%. The limit is about turnover, not profit, so paying the owner a salary does not help you stay under it.
At a company on 0%, the dividend leaves ALL 73,200 more. At a company on 15%, the salary leaves ALL 258,000 more. These figures cover income tax only.
When one route wins, and when the other does
For a company on 0%, the two routes give the same tax at ALL 936,000 a year, about ALL 78,000 a month. Below that, the salary carries less income tax. For example, at ALL 600,000 a year the salary has no tax at all, while the dividend pays ALL 48,000. Above ALL 936,000, the dividend carries less.
For a company on 15%, a dividend costs 21.8% in total (15% in the company, then 8% of what is left). The salary stays lighter on income tax up to very high amounts, about ALL 23.9 million a year.
Dividend deadlines
How Pivot helps
We work out the split between salary and dividend for your year, with contributions included. We run the payroll, prepare the profit decision and its filing by 31 July, and your DIVA in March. If the company's turnover is getting close to ALL 14 million, we warn you in time.
Ask us to set up your salary and dividend. Related: how much it costs to hire someone in Albania and business taxes in Albania for 2026.
Official sources and period
- Tax administration: Law no. 29/2023 on income tax, as amended
- Tax administration: taxable income of individuals
Sources: Law no. 29/2023 on income tax, as amended, articles 12(1)(b) and (c), 21(2), 22, 23(2), 24(1), 24(3)(a) and 24(4), 41, 48, 50(1)(d) and (k), 56(2) and (4), 58(1)(a), 59, 69(1)(dh) and 72; Instruction no. 26 of 8.9.2023, as amended, points 12.6, 22, 24.1, 56.3, 67 and example 4 of point 24.6; Instruction no. 23 of 9.12.2014 on contributions, as amended, points 3.1.1, 3.1.3, 3.1.4, 3.1.6 and 3.1.7. Checked on 28 October 2026. Examples with figures are illustrative, except those named as the instruction's examples.
