OSVČ vs. s.r.o.
How to take money out of an s.r.o.
Money in the company is not automatically yours — unlike with a self-employed person (OSVČ), you have to withdraw it from the limited liability company (s.r.o.) legally. You have three routes: a managing director's salary (remuneration), a share of profit, or a combination of the two. They differ in contributions and tax.
Three ways to get money out of the company
Managing director's salary / remuneration
tax-deductible cost for the company · contributions
Reduces the company's profit, but you pay employment income tax and insurance contributions. Builds up your pension and sickness insurance.
How remuneration is taxedShare of profit
15% withholding tax · no insurance contributions
Only after the general meeting approves the financial statements. Double taxation (21% + 15%), but no social or health insurance.
Worked exampleA combination of both
the most common in practice
A low managing director's remuneration (entitlement to insurance) + a share of profit payout. Discuss the optimisation with a tax advisor.
Why people combine themManaging director's salary vs. share of profit — comparison
| Aspect | Managing director's salary / remuneration | Share of profit |
|---|---|---|
| Company cost | yes — reduces the corporate income tax base | no — paid out of after-tax profit |
| Tax | employment income tax 15% (advance), 23% above the threshold | 15% withholding tax (§ 36 ZDP) |
| Social + health insurance | payable (employee and employer contributions) | not payable — no insurance contributions |
| Double taxation | no (only once — at the level of the managing director's income) | yes: 21% in the s.r.o. + 15% on payout |
| Entitlement to pension / sickness insurance | yes — builds up social insurance | no — a share of profit does not count towards a pension |
| When it can be paid out | on an ongoing basis (monthly) | only after the financial statements are approved by the general meeting (§ 40 ZOK) |
| When it pays off | you need a regular income and entitlement to insurance | you have a profit, do not need to build up a pension, want lower contributions |
Rates and statutory provisions verified for 2026 (Act No. 586/1992 Coll., on Income Taxes; Act No. 90/2012 Coll., on Business Corporations). A managing director's remuneration is taxed as employment income; a share of profit by a separate 15% withholding tax.
Worked example of double taxation (profit of 100 Kč)
- Company profit: 100 Kč what the s.r.o. earns before tax
- Corporate income tax 21% = 21 Kč § 21(1) ZDP; the 21% rate has applied since 2024 (verified 2026)
- 79 Kč remains for distribution to the members 100 − 21 = 79 Kč (after-tax profit)
- Withholding tax on the share 15% of 79 Kč = 11.85 Kč § 36 ZDP; withheld and remitted by the s.r.o.
- The member receives ≈ 67.15 Kč in hand 79 − 11.85 = 67.15 Kč — no additional insurance contributions
- Effective taxation of distributed profit ≈ 32.85% of the original 100 Kč you have paid ≈ 32.85 Kč in taxes (verified 2026)
What to take away from the calculation
A share of profit goes through double taxation (21% at the company level + 15% withholding tax on payout), giving an effective burden of ≈ 32.85% — but without social and health insurance. By contrast, a managing director's salary (remuneration) is a tax-deductible cost for the company and reduces the corporate income tax base, but it is subject to employment income tax and insurance contributions. The specific optimum depends on the level of profit and on whether you need to build up a pension and sickness insurance (verified 2026; this worked example does not replace a consultation with a tax advisor).
When and how tax is withheld from a share of profit
A share of profit can only be paid out after the financial statements are approved by the general meeting and once the statutory tests are met (in particular the insolvency test under § 40 ZOK — the company must not bring about its own insolvency by the payout).
When the obligation to withhold the 15% tax arises: upon the payout itself. If the payout does not occur by the end of the third calendar month following the month in which the general meeting decided on the distribution of profit, the obligation to withhold the tax arises as of that date. Remittance: the s.r.o. remits the withheld tax to the tax office by the end of the month following the month in which the obligation to withhold arose (§ 36 ZDP; verified 2026).
Managing director's remuneration and combining approaches in practice
A managing director's remuneration is employment income — it is taxed like a salary and is subject to contributions. Social insurance on a managing director's remuneration is not payable only at very low amounts below the decisive income threshold (roughly up to ≈ 4,500 Kč per month in 2026). For health insurance, a managing director is subject to a contribution obligation; if the remuneration falls below the minimum, the employer usually tops it up to the minimum assessment base tied to the minimum wage (22,400 Kč in 2026 — verified 2026, check the current amount).
Why people combine them: in practice, a small or zero managing director's remuneration is often set, with the rest paid out as a share of profit. A managing director's remuneration is a tax-deductible cost for the company and builds up entitlement to a pension and sickness insurance; a share of profit, although taxed twice, comes without insurance contributions. The ideal ratio depends on the level of profit, the need for social insurance and tax credits — which is why a calculation with a tax advisor is worthwhile.