How Does a SARL Manager (Gérant) Get Paid? Salary, Dividends and the 10% Rule

The two ways a SARL manager gets paid

A SARL manager (gérant) has two channels for taking money out of the company, and the whole question of SARL manager pay runs along that line. The first channel is remuneration attached to the function: a salary-type payment for the work of managing, which can be fixed, proportional to results, or both. The second is the return on what the manager has put into the company as a shareholder: dividends voted by the annual meeting, and interest on sums left in a shareholder loan account (compte courant d'associé). Share option schemes are not directly available to SARLs, so for this form the choice is genuinely between those two channels.

There is no pre-set answer to which channel a SARL manager should favour. Everything depends on the manager's situation and the company's, and only a case-by-case review of the overall cost and the benefits attached to each route allows an informed decision. What this article gives you is the machinery you need for that review: who must vote your pay and what happens if nobody does, how your shareholding decides which social-security scheme charges you, what each channel costs in tax and contributions, and the one rule that catches most foreign founders by surprise — the 10% threshold above which a majority manager's dividends are charged like work income.

Pay attached to the function: fixed, proportional, or benefits

When the manager takes remuneration for the function itself, it can be structured three ways. Whichever structure is chosen, the basis of any profit-share or turnover percentage must be spelled out precisely — participation in net or gross profits, or a percentage of turnover — because imprecision is what generates disputes later.

Expenses are a separate track: for costs incurred in carrying out the role, the manager is entitled either to reimbursement against receipts or to lump-sum allowances. The company deducts all of this from its profits — but if the total package is excessive for the service actually rendered, the excessive part is added back to the company's taxable profit and taxed in the manager's hands as a distribution, a mechanism covered below.

Who decides the SARL manager's pay — and the cost of skipping the vote

The pay of a SARL manager must be fixed either by the company's articles (statuts) or by a decision of the shareholders as a body. In practice the articles are never used, because fixing an amount there would mean amending the articles every time the pay changes. So the standard route is a shareholder decision, adopted by one or more shareholders representing more than half of the shares, usually taken each year at the meeting that approves the accounts — although the shareholders can choose another rhythm, and, if the articles allow it, the decision can be taken by written consultation or by a deed signed by all shareholders.

Two features of that vote matter enormously to an owner-manager. First, fixing the manager's pay is not a related-party agreement subject to the special approval procedure — which means it does not go into the special report, and the manager, if a shareholder, takes part in the debate and votes on his own pay. A clause in the articles that tried to strip the manager of that vote would very likely be struck down. Second, the courts stay out of it: a judge cannot substitute for the shareholders to fix or raise the manager's pay, and a shareholder decision taken in accordance with the articles cannot be modified by court order unless it is shown to be irregular or abusive. A manager unhappy with his pay must ask the shareholders for a new decision; if a refusal is genuinely abusive, the remedy is a court-appointed proxy authorised to convene the meeting and vote in place of the shareholders whose vote was abusive — not a judge-set salary.

Once granted, the pay keeps running until a regular decision changes it. A manager who has not been removed remains entitled to his remuneration even if he is not exercising his functions, and it must continue through absence and illness. Conversely, the shareholders can reduce or abolish it by a new decision on the same majority — and where the company hits financial difficulty, a manager-shareholder who wants to waive his pay temporarily should do it cleanly: either a shareholders' decision, or a formal debt waiver granted to the company before 31 December of the tax year, with the company ceasing to book the amounts. Otherwise the tax administration can tax pay the manager chose not to collect.

Paying yourself without a vote: three ways it goes wrong

A manager who fixes his own remuneration without a shareholder decision is exposed on three fronts, and the exposure does not depend on the pay being excessive.

• Reimbursement. A shareholder, a new manager, a buyer of the company or a liquidator can have the manager ordered to repay the sums received — even if the principle of paid management appears in the articles, and even if the pay was modest. The only shield is time: amounts received more than 5 years earlier are in principle prescribed, unless the pay was hidden from the accounts, in which case it can be claimed even beyond that.
• Criminal exposure. Unauthorised pay grounds a prosecution for misuse of company assets (abus de biens sociaux), carrying up to 5 years' imprisonment and a €375,000 fine — and a conviction is possible even where the remuneration was not excessive, simply because it was taken without the competent body's authorisation.
• Tax risk for the company. The administration can add back to the company's taxable result remuneration that was never approved by the competent body.

The case law does allow repair: shareholders can validly ratify pay after the manager has received it. A majority manager will obtain that ratification without difficulty; a minority manager may not. Excessive pay is a separate danger with its own sanctions: majority managers who use their position to vote themselves appointments excessive for the company's resources commit misuse of company assets, must repay the excessive part, can be made to bear company debts for management fault if the company later fails, and are taxed on the excess not as salary but as investment income — with the company losing the deduction on that fraction.

Majority or minority: the status that decides how SARL manager pay is charged

Before any comparison of salary against dividends, one classification decides everything: is the manager a majority manager (gérant majoritaire) or a minority or equal manager (gérant minoritaire / égalitaire)? A majority manager is charged as a self-employed worker (travailleur indépendant) — whether or not he takes any pay at all. A minority or equal manager who takes pay is treated as an employee-equivalent (assimilé salarié) under the general social-security scheme; if he takes no pay, he belongs to no mandatory scheme whatsoever. The classification does not depend on being a shareholder: a non-shareholder manager follows exactly the same rules.

The test is set by the social-security code: managers are treated as employees on condition that they do not hold, together, more than half of the share capital — and shares owned outright or in usufruct by a manager's spouse, PACS partner, or unemancipated minor children count as the manager's own. Only managers appointed as such count; a supposed de facto co-manager's shares are ignored. Where several managers form a management board, all their holdings are added together, and every member of the board shares the same status: if the board together crosses half the capital, each manager is a majority manager — including a member who personally holds no shares at all.

The counting has edges that regularly decide real cases, and they cut in both directions. Shares held by an unmarried partner do not count — a manager holding exactly half the capital with the other half held by his partner is on the employee-equivalent side. Shares held in bare ownership do not count (the bare owner has neither enjoyment nor administration of them), unless the articles give the bare owner the rights normally belonging to the usufruct holder. For shares in undivided ownership, only the manager's fraction counts, provided the co-owners are not in dispute over the attached rights. Shares issued to a manager's spouse for a contribution of services do not count, because they sit outside the share capital. And the test looks through structures: where the manager, though a minority holder directly, controls the SARL through another company he dominates — for example with his spouse — the indirect holding is added and he is a majority manager.

Edge cases in the majority test

Taking a salary from your SARL: how the pay is taxed and charged

On the income-tax side, the two categories of manager end up in essentially the same place. A minority manager's remuneration is taxed in the salaries category; a majority manager's is taxed under Article 62 of the tax code (CGI), which itself applies the salary rules. In both cases the taxable income is the full amount received — including lump-sum allowances and the value of benefits in kind — reduced by mandatory social contributions, the deductible fraction of the CSG and, for majority managers, optional group-insurance and supplementary-scheme contributions within the legal ceilings. The result then takes either the standard 10% deduction for professional costs, capped at €14,171 for 2023 income, or actual documented expenses; choosing actual expenses means adding lump-sum allowances and reimbursements back into taxable pay.

Two details differ with status. Benefits in kind are valued at real cost for a majority manager whatever their nature, while a minority or equal manager can use flat-rate valuation for meals, a vehicle or IT tools (housing stays at real value unless there is also an employment contract). And lump-sum expense allowances paid to managers of either category are taxable — only reimbursements of documented, strictly professional expenses escape tax, provided they do not duplicate the 10% deduction.

For the company, the manager's remuneration is deductible from taxable profit as long as it corresponds to actual work and is not excessive for the service rendered. Where the administration establishes that pay is excessive, the excess is taxed in the manager's hands as investment income rather than salary and is non-deductible for the company — the double penalty that polices the whole system.

The social cost: employee-equivalent versus self-employed

The social-contribution treatment is where the majority/minority split matters most — and it is the real driver of the salary-versus-dividends arithmetic. A paid minority or equal manager is charged like an executive employee: the company withholds and pays the standard employee and employer contributions to URSSAF, plus AGIRC-ARRCO supplementary pension, with two carve-outs — no unemployment-insurance and no wage-guarantee contributions unless there is also a genuine employment contract. There is no minimum contribution base: no pay, no contributions (and no scheme). The base covers everything received for the mandate — including benefits in kind and sums credited to the manager's account — and, where an employment contract exists alongside, the salary for the technical duties too.

A majority manager instead files and pays personally under the self-employed scheme, with contributions assessed on his income declared through the personal income-tax return, collected by URSSAF monthly (or quarterly on request), first provisionally on the last known income and then regularised once the year's income is declared. In an IS-taxed SARL, the contribution base is the net remuneration — with the 10% tax deduction added back — plus the fraction of dividends exceeding the 10% threshold described below. The main 2024 rates give the shape of the cost: sickness at progressive rates from 0.5% up to 7.20% (6.50% on income above five annual social-security ceilings), basic old-age at 17.75% up to the annual ceiling of €46,368 and 0.60% beyond, supplementary pension at 7% up to €42,946 and 8% above (capped at four ceilings), invalidity-death at 1.30% up to the ceiling, family allowances from nil below 110% of the ceiling to 3.10% above 140%, and CSG-CRDS at 9.70% on income plus mandatory contributions. A reform of the self-employed contribution base applies to periods from 1 January 2025: a single, simplified base built on income after professional expenses, reduced by a 26% flat allowance.

Taking dividends from your SARL: the 30% flat tax and the option

Dividends reach a manager only through his shareholder hat, after the annual meeting has decided a distribution out of distributable profit. For an individual shareholder resident in France, the company itself acts as paying agent and withholds two amounts at source: a compulsory 12.8% income-tax prepayment, and social levies at a global 17.2% — the familiar 30% package (prélèvement forfaitaire unique, PFU). The 12.8% is a prepayment, not a final tax: it comes back as a tax credit against the final income-tax bill. Households whose reference income two years earlier was below €50,000 (single) or €75,000 (joint) can ask to be dispensed from the 12.8% withholding.

The final taxation is then, by default, the flat 12.8% on the gross dividend — with no 40% allowance, no deduction of costs, and no deductible CSG. The alternative is an express, irrevocable option for the progressive income-tax scale, which is global for the year: it covers all the household's investment income and gains, not just the dividend. The option buys three advantages: the 40% allowance on regularly decided distributions, the deduction of custody and collection costs, and the deductibility of 6.8 points of the CSG withheld. Choosing between the two is a comparison exercise between your marginal income-tax rate across all income and the 12.8% flat rate — with one side-effect worth knowing: opting for the scale mechanically raises the household's withholding-at-source rate on other income for the following period.

The company's paying-agent duties have teeth: the withholdings must be remitted to the Treasury within the first 15 days of the month following payment, and the amounts paid must be declared on the single tax form (IFU) by 15 February of the following year. A corporate shareholder is different territory: it simply includes the dividend in its own taxable profit, subject to the parent-subsidiary regime where it applies.

The 10% rule: when a SARL manager's dividends are charged like salary

Here is the rule that reshapes the whole salary-versus-dividends calculation for a majority manager. For managers under the self-employed scheme, the social-contribution base includes, on top of remuneration, the dividends received that exceed 10% of the share capital, the share premiums and the sums paid into the shareholder loan account. Below that threshold, dividends bear only the 17.2% social levies inside the 30% flat package. Above it, the excess is added to the manager's contribution base and charged at the self-employed rates like work income — on top of its income-tax treatment as a dividend.

The threshold is personal to the structure of your company: it grows with the capital you have subscribed, the premiums paid in, and the balance you keep in your shareholder loan account. Two managers taking the same dividend from companies with different capital structures face entirely different charges, which is why no serious answer to "salary or dividends?" exists without first computing this threshold.

Paying yourself nothing: what a SARL manager still owes

Taking no pay does not switch the machine off — and here the two statuses diverge completely. A majority manager remains affiliated to the self-employed scheme with or without remuneration, and even if the company has ceased activity or sits dormant; the affiliation runs from the company's registration, activity or not, and ends only with dissolution and striking-off. Minimum contribution bases then apply: the sickness contribution cannot be computed on a base below 40% of the annual social-security ceiling (a €93 minimum contribution in 2024), basic old-age on a base below 450 times the hourly minimum wage (€5,243 for 2024), and invalidity-death on a base below 11.5% of the ceiling (a €69 minimum in 2024). In the first 2 calendar years of activity, provisional contributions are computed on a flat base of 19% of the ceiling, regularised once real income is known. Recipients of the RSA or the activity bonus are dispensed from the minimums unless they ask otherwise.

An unpaid minority or equal manager owes nothing — because he is covered by nothing. No employee scheme, no self-employed scheme; only universal health protection covering health costs in kind for stable French residents, with the option of voluntary old-age, invalidity and workplace-accident insurance. In practice most unpaid minority managers rely on cover from another activity. The practical consequence for structuring: an unpaid majority manager still generates a running social cost, while an unpaid minority manager generates none — but also builds no pension and carries no daily-allowance cover.

Choosing between salary and dividends: how the decision actually runs

With the machinery on the table, the decision structure for SARL manager pay comes down to a sequence any founder can follow. First, fix your status with the majority test — including family shares, board totals and indirect holdings — because it sets which scheme charges you and whether dividends can ever enter your contribution base. Second, compute your 10% threshold. Third, compare the channels on their full cost: remuneration is deductible for the company and buys social protection; dividends are paid out of taxed profit, bear the 30% package, and — for a majority manager — are charged as work income above the threshold. Fourth, weigh the protection side, not just the cost side: the employee-equivalent scheme is fuller but fixed and expensive; the self-employed scheme costs less and leaves the manager to top up his position through optional pension, life-and-disability and loss-of-work contracts — whose value depends on his age and health. A precise study is needed before choosing, all the more because being attached to the employee scheme does not, by itself, open any right to unemployment benefit.

The unemployment question in SARL manager pay

No SARL manager — majority, equal or minority — gets employee unemployment insurance from the mandate itself. The only route in is a genuine employment contract alongside the mandate, and it is realistically open to minority managers alone: the contract must cover technical duties clearly distinct from running the company, separately remunerated, performed under real subordination to the company — conditions a majority manager cannot meet by definition, and which the unemployment body refuses to recognise for equal managers. The contract must go through the related-party approval procedure, and in a small company the distinctness of the technical role is often hard to prove. When in doubt, a formal ruling from France Travail settles whether the contract is covered — worth obtaining before years of contributions are paid for nothing.

Outside employee cover, two safety nets exist. Self-employed managers have access to the self-employed workers' allowance — a flat allowance payable for 6 months — in narrow cases: judicial liquidation, judicial rehabilitation where the court conditions the plan on replacing the manager, or definitive cessation of a non-viable activity. And any manager can buy voluntary loss-of-work insurance through the dedicated associations (GSC or APPI) or an insurer; premiums the manager pays personally are not deductible (except group contracts subscribed by Article 62 managers, deductible within a ceiling), and premiums the company pays are deductible for it but taxable pay, subject to contributions, for the manager — while benefits received under these policies are not taxable.

The exit payment: how a leaving manager's indemnity is taxed

Indemnities paid to a SARL manager on ceasing his functions are in principle taxable pay, whatever his category. The exception is forced cessation — removal in particular: the indemnities received for the forced termination of the mandate or the employment contract are exempt up to 3 times the annual social-security ceiling, €139,104 for 2024, with CSG and CRDS due on whatever fraction is taxed. For a founder negotiating his own future exit terms, that exemption ceiling is a parameter worth building into the package from the start.

Frequently asked questions about SARL manager pay

This article states the rules applicable to SARL and EURL managers as most recently updated, including 2024 figures for ceilings, rates and thresholds; figures are revised annually and the self-employed contribution base is reformed for periods from 1 January 2025. It is general information, not legal or tax advice for your situation. Before fixing your remuneration, voting a distribution or relying on any threshold, take advice on the rules and figures in force at the date of your decision.