Published on 10 May, 2021
How to pay yourself a salary as a company director
A “bucket company” allows you to “cap” the tax on profits distributed by a trust to
30% or 27.5%. This is much less than the individual top marginal rate of 47%!
30% or 27.5%. This is much less than the individual top marginal rate of 47%!
OPTION 2. Distribute $90,000 each to individuals 1 & 2 and distribute balance of $70,000 to a “bucket” company at a 30% tax rate . Total tax payable = $61,874 ( 24.75%)
Value of strategy is $8,824 in tax saved!
“Bucket”
Company
$70,000 Income from Trust
taxed at lower rates of
30% or 27.5%
Future franked dividends
go to Shareholders
go to Shareholders
Uses Cash to:
- Invest in shares, properties and loan funds to other companies
- Should never operate a business or engage in risky activities.
Related Articles
Minimising Capital Gains Tax on investment property guide
Minimising Capital Gains Tax on investment...
Division 7A compliance: Essential updates for business owners in 2025
Division 7A compliance: Essential updates for...
How to save FBT costs with your next Electric Vehicle
How to save FBT costs with your next Electric...
Contact Us
Tax Insights & Business Advice
Receive only the guidance that matters. Subscribe now for personalised tips and expert advice, directly suited for you and your business.