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 Director fee vs Salary

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TSkent_lau7
post Apr 18 2015, 11:10 AM, updated 9y ago

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What is the difference?
Can anyone tell me the difference? thank you in advance.

because if I pay myself director fee, I don't need to pay EPF, am I right?
I am working director.
Bonescythe
post Apr 18 2015, 11:16 AM

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If listed company.. then the director fees need approval from shareholder lor..


TSkent_lau7
post Apr 18 2015, 04:09 PM

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QUOTE(Bonescythe @ Apr 18 2015, 11:16 AM)
If listed company.. then the director fees need approval from shareholder lor..
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Thank you, Bone
Hapeng
post Apr 18 2015, 09:38 PM

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QUOTE(kent_lau7 @ Apr 18 2015, 11:10 AM)
What is the difference?
Can anyone tell me the difference? thank you in advance.

because if I pay myself director fee, I don't need to pay EPF, am I right?
I am working director.
*
yes for director's fee u can opt not to contribute EPF and Socso.
Income tax wise its still the same.

This post has been edited by Hapeng: Apr 18 2015, 09:40 PM
guy3288
post Apr 19 2015, 12:22 AM

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take all income as salary can put you in high income bracket, apply loan , top end credit card etc easier.

Take all income as director fee, you wanna apply loan, credit card susah next time as director fee is not taken as fixed income even though you control 100% of the Co.

Best is to take some as salary and some as director fee, avoid high income status, next time kids wanna apply for scholarship etc you can just put your salary as income.



TSkent_lau7
post Apr 20 2015, 10:33 AM

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QUOTE(guy3288 @ Apr 19 2015, 12:22 AM)
take all income as salary can put  you in high income bracket, apply loan , top end credit card etc easier.

Take all income as director fee, you wanna apply loan, credit card susah next time as director fee is not taken as fixed income even though you control 100% of the Co.

Best is to take some as salary and some as  director fee, avoid high income status, next time kids wanna apply for scholarship etc you can just put your salary as income.
*
Thank you very much, guy3288

Now I know director fee is not considered fixed income.
How do the bank knows that money is director fee and not salary? is it based on if I have contribute to EPF or not?
guy3288
post Apr 20 2015, 01:28 PM

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QUOTE(kent_lau7 @ Apr 20 2015, 10:33 AM)
Thank you very much, guy3288

Now I know director fee is not considered fixed income.
How do the bank knows that money is director fee and not salary? is it based on if I have contribute to EPF or not?
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Yes bank nowadays want to see your EPF contrib as proof of your regular monthly income.

If you dont want to contrib EPF, another way is to draw monthly income as allowance.
But banks may not want to accept that allowance slips (even though you draw monthly) for application
of loan or credit cards.

My wife did not want to contrib to EPF, so no choice only paid as monthly allowance. recently tried applied Citibank cc, it insisted must see EPF statement despite we gave them EA, BE and income slips.

you must know what is the reason you want to draw income as salary, Dir fee or allowance.
knwong
post Apr 20 2015, 04:53 PM

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Is dividend consider income?

 

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