Salary or dividends: taking money out of your Oy in 2026

Karma Accounts · Published 21 September 2026

Most owners of a small Finnish Oy take some salary and some dividend, and the reason is arithmetic rather than opinion. Salary is cheap while the amount is small and expensive once it is large. A dividend is cheap only up to a line drawn by last year's balance sheet, and ordinary earned income above it. Here is how both are taxed in 2026.

Two routes, two different things

Salary is pay for work: earned income for you, a deductible cost for the company, and payroll with reports attached.

A dividend is a share of profit the company has already paid tax on. It is decided at a shareholders' meeting, based on the last adopted financial statements, and payable only out of distributable funds.

The company side

A Finnish limited company pays 20 % income tax on its profit in 2026. Salary and its employer costs are deducted before that 20 % is worked out. A dividend is not.

For an owner insured under YEL the employer side is unusually light, because there is no employer pension contribution: YEL replaces it. What remains is the employer's health insurance contribution, 1.91 % of the wage in 2026.

How a dividend from an unlisted company is taxed

Everything turns on 8 % of the mathematical value of your shares.

Part of the dividend	How it is taxed
Up to the 8 % line, first 150 000 euros a year	capital income, 25 % taxable
Up to the 8 % line, above 150 000 euros	capital income, 85 % taxable
Above the 8 % line	earned income, 75 % taxable

Capital income is taxed at 30 % up to 30 000 euros of taxable capital income in a year and 34 % above that in 2026. Inside the 8 % line and under the 150 000 euro limit a quarter of the dividend is taxable, so your own tax on it is 7.5 % of the dividend while your taxable capital income for the year stays within 30 000 euros, and 8.5 % on the part beyond — which comes sooner if you have other capital income, such as rent or gains. That is on top of the 20 % the company has already paid on the same money. It is the lightest personal tax on a dividend, and the most limited. The 150 000 euro limit is per person per year and counts every unlisted dividend you receive.

Above the 8 % line the dividend is earned income, 75 % of it taxable at your own progressive rate. That is the rate salary would have met, except the company has already paid 20 % on the same money. On the whole dividend, whichever part it falls in, the company withholds 7.5 % in advance up to 150 000 euros and 28 % above; that is a prepayment, and your final tax is worked out in your assessment.

Where the 8 % line comes from

The mathematical value of a share is the company's net assets, assets less liabilities, divided by the shares outstanding. The Tax Administration works it out from the financial period that ended in the year before the dividend year.

This is the part people miss: this year's cheap dividend was settled by last year's balance sheet. Net assets of 40 000 euros give an 8 % band of 3 200 euros; net assets of 200 000 euros give 16 000. Emptying the company every December shrinks next year's band. Two things come off the share value first: a home among the company's assets that you or your family live in, if you are an owner-manager with over 30 % alone or over 50 % with your family; and money that you or your family have borrowed from the company, if you own at least 10 % alone or with your family.

YEL does not move

Your pension insurance is based on your confirmed YEL income, not on what you pay yourself. In 2026 the contribution is 24.40 % of that income, the same at every age, and the insurance is compulsory once your confirmed income reaches 9 423.09 euros a year, provided you live in Finland, have turned 18, are below the upper age limit (70 for anyone born in 1962 or later), and have been self-employed for at least four months without a break. You are inside YEL if you work in a leading position and own over 30 % of the company alone, or over 50 % with your family.

So "I will take dividends and save the pension cost" does not work: the cost is identical either way. It runs the other way too. Your pension, sickness allowance, parental allowance and unemployment security are all measured from YEL income rather than from your payslip, and earnings-related unemployment security needs confirmed income of at least 15 481 euros in 2026. Even the health insurance contributions you pay yourself are charged on YEL income, not on your wage.

What salary still gives you

Earned income deductions. The work income deduction, worth up to 3 430 euros off your tax in 2026 (more if you had turned 65 before the year began or are the guardian of a minor child), is earned by salary and by an earned income dividend alike, but the 750 euro expense deduction only meets wages.
Room under the company rate. Salary leaves the profit the 20 % is charged on.
A number a bank recognises. Applying for a mortgage, salary is the figure read first; a dividend history is not the same conversation.

Travel sits outside both: an Oy can pay its owner tax-free mileage and per diems.

An illustration, not advice

A company makes 60 000 euros in 2026 before the owner takes anything out, and its net assets a year earlier were 40 000 euros, so the 8 % band is 3 200 euros. The owner is the sole shareholder, is under 65, is insured under YEL without the discount for the newly self-employed, has no other income and no children, pays no church tax, and we use the Tax Administration's confirmed average municipal rate for 2026, 7.60 %. The health insurance contributions are the same in all three cases and are left out. YEL is left out too, but it is not neutral. The premium is the same in euros whichever way you take the money out, and it is deductible, by the company if the company pays it or from your earned income if you pay it yourself, but the deduction is worth more on some routes than on others. At the minimum YEL income, this makes YEL's cost after tax differ between the routes by up to about 120 euros if the company pays it and about 300 if you do, and at a YEL income of 30 000 euros by up to about 600 and 1 100 respectively. Whoever pays, it widens the gap below rather than closing it.

Salary only. A salary of 58 875 euros plus 1 125 euros of employer health insurance contribution uses the whole 60 000. The company pays no tax. The owner pays about 14 600 euros and keeps about 44 300.
Dividend only. The company pays 12 000 euros and distributes 48 000. Of that, 3 200 euros is capital income and costs 240 euros; the other 44 800 is earned income, taxable at 75 %, and costs about 4 200. The owner keeps about 43 500.
Salary 30 000 euros, the rest as dividend. The company pays about 5 900 euros and distributes about 23 500. The owner pays about 8 900 and keeps about 44 600.

About a thousand euros separates best from worst, and the order flips as soon as the net assets, the profit, your other income or the distributable funds change. Raise the net assets and the dividend route improves; raise the profit and salary gets expensive first. That is why there is no right percentage and we will not quote you one.

The formalities people get wrong

A dividend needs adopted financial statements and a shareholders' decision saying how much is distributed and from which funds. The company must not be insolvent when it decides, and the payment must not make it insolvent.

Money taken before any of that is a loan from the company. If you or members of your family, together or separately, own at least 10 % and it is unpaid on 31 December, the unpaid amount is taxed as your capital income for that year. Repayments within the next five years can be deducted from capital income. A loan nobody meant to repay can be treated as a disguised dividend, which is the expensive outcome.

What we do

We run the payroll, prepare the financial statements and the shareholders' decision, and tell you what your 8 % band actually is before you decide anything. If you are taking money out of your Oy for the first time, or have done it the same way for years without checking, book an introduction and bring last year's balance sheet. Choosing between a toiminimi and an Oy is a separate question. See what we do.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

Your Oy's books and year-end

Bookkeeping, VAT, the financial statements and the tax return for 199 € a month plus VAT up to 240 000 € of turnover, 249 € up to 500 000 € and a written quote above that. See accounting for limited companies.

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