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Shareholder Salery

An amount can be paid to a shareholder employee, which will be treated as income other than from a PAYE Income for the shareholder employee. For this, the share holder employee should not derive regular salaries or wages of a regular amount for regular pay periods of one month or less and he/she should derive less than 66% of their annual gross income as wages or salaries. Shareholders of look through companies cannot derive shareholder salary.1

This amount of shareholder salary is allowed as a deduction as an amount of expenditure on employment income, and its payment period is extended until that last day by which a shareholder employee should file his/her return.2

Part R - General collection rule
Subpart RD - Employment-related taxes
RD 3B - Shareholders who are employees, for some companies: income other than PAYE

Part E - Timing and quantifying rules
EA 4 - Deferred payment of employment income
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