A company owner in Namibia takes money out in two ways: a director's salary or dividends from profit. According to local auditors' practice, the first path is in many cases more efficient: the salary is deducted from the company's profit and tax is charged once, on the personal income tax scale. The right choice depends on the structure of the company; it is reviewed at a free initial consultation.
In short
- An owner can work as a director or senior manager and receive a salary: it is deducted from profit as an expense.
- Tax on a salary is calculated on the scale from 0% to 37%; the path profit, corporate tax, dividends gives two taxes in a row.
- Dividend tax: 10% for a resident, an owner with a residence permit or permanent residence, and a non-resident holding 25% or more.
- Employer social payments add to the cost of a salary.
Two ways to take money out of a company
| Criterion | Director's salary | Profit and dividends |
|---|---|---|
| What happens in the company | the salary is deducted from profit as an expense | profit is subject to corporate income tax: 30% (a cut to 28% is planned from 1 April 2027) |
| The owner's tax | personal income tax on the scale from 0% to 37% | dividend tax on payout: 10% for a resident, an owner with a residence permit or permanent residence, and a non-resident holding 25% or more |
| How many times it is taxed | once, on the personal income tax scale | twice: corporate income tax, then dividend tax |
| In addition | employer social payments on the salary | money is paid out when profit is distributed |
The two paths at a glance
- Path 1. Company income, director's salary (an expense, deducted from profit), the owner's personal income tax on the scale from 0% to 37%.
- Path 2. Company income, profit, corporate income tax 30%, dividends to the owner, dividend tax 10%.
Path 1: a director's salary
The owner appoints themselves director or senior manager and receives a salary. For the company it is an expense: the salary is deducted from profit, so corporate income tax is charged on a smaller amount. The owner pays personal income tax on the scale from the Namibia taxes guide: a rate from 0% to 37% applies to the part of annual income above the threshold of its band.
The employer also pays social contributions on the salary: social security 0.9% (capped at N$99 per employee per month), occupational injury 0.9–8%, and, where payroll exceeds N$1 million a year, a further 1% for vocational training. Details: employer social payments.
Path 2: profit, corporate tax, dividends
If money stays in the company as profit, the company pays corporate income tax: 30%. Then, when dividends are paid to the owner, another tax is charged: 10% (for a resident, an owner with a residence permit or permanent residence, and a non-resident holding 25% or more). More: corporate income tax and dividend tax for foreigners.
A simplified illustration (rates of 30% and 10%, other payments not included):
| Step | Amount, N$ |
|---|---|
| Company profit | 100,000 |
| Corporate income tax 30% | 30,000 |
| Left to pay out as dividends | 70,000 |
| Dividend tax 10% | 7,000 |
| The owner receives | 63,000 |
Out of every N$100,000 of profit the owner receives N$63,000: the total burden on this path is 37%.
Comparing the rates
On the path profit, then dividends, the total burden in the simplified illustration is 37%. The personal income tax rates on the part of income up to N$1,550,000 are below that figure; above this threshold the 37% rate is level with the dividend path.
| Part of annual income, N$ | Personal income tax rate | Path profit, then dividends |
|---|---|---|
| up to 100,000 | 0% | 37% in total |
| 100,001 – 150,000 | 18% | 37% in total |
| 150,001 – 350,000 | 25% | 37% in total |
| 350,001 – 550,000 | 28% | 37% in total |
| 550,001 – 850,000 | 30% | 37% in total |
| 850,001 – 1,550,000 | 32% | 37% in total |
| over 1,550,000 | 37% | 37% in total |
This is a simplified illustration, not a calculation for a specific company: employer social payments are added to a salary, and the result depends on the income level and the structure of the company.
If the owner is a non-resident
Namibia applies separate rates to non-residents: directors' fees are taxed at 25%, and dividends to a non-resident depend on the shareholding. How these rates apply to a specific owner is determined by the company's auditor; the general overview is in the Namibia taxes guide.
Profit that stays in the company
Profit that the owner does not take out stays in the company and is subject to corporate income tax: 30% (a cut to 28% is planned from 1 April 2027). Dividend tax is charged only at the moment of payout. So the choice between the two paths is linked both to how much money the owner needs to receive and to how much stays in the company's working capital.
A full example: a salary of N$1,000,000 a year
The personal income tax scale is complete, so the tax can be calculated band by band (a simplified illustration without employer social payments):
| Part of income, N$ | Amount in the band, N$ | Rate | Tax, N$ |
|---|---|---|---|
| up to 100,000 | 100,000 | 0% | 0 |
| 100,001 – 150,000 | 50,000 | 18% | 9,000 |
| 150,001 – 350,000 | 200,000 | 25% | 50,000 |
| 350,001 – 550,000 | 200,000 | 28% | 56,000 |
| 550,001 – 850,000 | 300,000 | 30% | 90,000 |
| 850,001 – 1,000,000 | 150,000 | 32% | 48,000 |
| Total | 1,000,000 | about 25.3% | 253,000 |
For comparison: the same N$1,000,000 paid to the owner from profit as dividends (a simplified illustration, rates of 30% and 10%).
| Path | Taxes, N$ | The owner receives, N$ |
|---|---|---|
| Director's salary of N$1,000,000 | 253,000 (about 25.3%) | 747,000 |
| Profit of N$1,000,000 and dividends | 300,000 + 70,000 = 370,000 (37%) | 630,000 |
Employer social payments are added to a salary, so the result depends on the specific situation; the company's auditor calculates it.
Dividend tax by owner status
| Owner status | Dividend tax |
|---|---|
| resident of Namibia | 10% |
| foreign non-resident holding 25% or more | 10% |
| non-resident holding less than 25% | 20% |
| owner with a residence permit or permanent residence | 10% |
Non-resident dividend rates are covered in dividend tax in Namibia for foreigners; owners with a residence permit will find residence permits in Namibia useful.
What else affects the choice
- the owner's status: resident, owner with a residence permit or permanent residence, non-resident;
- the annual income the owner wants to receive;
- company expenses and depreciation: company expenses and accelerated depreciation;
- who keeps the books and calculates taxes: an auditor instead of an accountant.
The company's auditor takes these points into account when calculating taxes. To set up a company and choose its structure, see register a company in Namibia.
This material is provided for reference. Data as of October 2026.
FAQ
Can an owner receive only a salary?
An owner can work as a director or senior manager and receive a salary. It is deducted from profit as an expense, and tax on it is calculated on the personal income tax scale.
How many taxes apply on the dividend path?
Two: corporate income tax (30%) and dividend tax on payout (10% for a resident, an owner with a residence permit or permanent residence, and a non-resident holding 25% or more).
What is the dividend rate for a non-resident?
A non-resident holding 25% or more pays 10%; the rate for others depends on the shareholding, see the status table above.
Does the employer pay contributions on the director's salary?
On employees' salaries an employer pays social security (0.9%, capped at N$99 per employee per month), the occupational injury levy (0.9–8%) and, where payroll exceeds N$1 million a year, 1% for vocational training.
