SAS president compensation: everything you need to know to make the right choice

It determines not only what the executive receives each month, but also their social security coverage, pension rights, the company's tax burden, and their ability to fund personal projects.

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Yet, this decision is often made when the company is founded, based on quick advice or an intuitive guess, and is rarely re-evaluated. The result: many SAS presidents pay more than they should, or have less protection than they realize.

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This article helps you understand the real consequences of each compensation option, beyond the basic legal mechanics.

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How does SAS president compensation work?

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A social status that changes everything

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A SAS president is treated as an employee for social security purposes. In practical terms, this means they are covered by the general social security scheme: the same funds, the same basic contributions, and the same calculation logic as a standard employee. This is a major difference from the majority manager of a SARL, who falls under the self-employed worker scheme.

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This affiliation with the general scheme has direct consequences on the cost of compensation. Social security contributions for a SAS president represent approximately 75% to 80% of the net salary, including employer contributions. This is higher than for a self-employed worker. But in return, the level of protection is higher, particularly regarding disability insurance and supplementary pensions.

How is compensation set?

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The compensation of a SAS president is not governed by the Labor Code. It is freely determined by the shareholders, either in the articles of association or by collective decision. In practice, this is often a decision made by the president themselves when they are the sole shareholder in a SASU.

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This freedom does not mean there are no rules. Compensation must remain consistent with the company's activity and results. A clearly excessive salary may be recharacterized by the tax authorities, and the portion deemed excessive added back into the company's taxable income. Conversely, a president who goes without pay for a long period deprives themselves of all social security coverage.

The specific nature of having no payslip when there is no compensation

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A SAS president who does not pay themselves any compensation has no payslip, contributes to no social security scheme, and accrues no pension quarters. They are legally a director, but socially invisible. This is a common situation in the early years of business, often for the sake of saving money. The problem is that these savings come at a cost later on, when the director realizes the extent of the rights they have failed to build up.

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What is the real cost of a SAS president's compensation?

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The cost of a salary under the general social security scheme

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For a SAS president paying themselves €5,000 net per month, the total cost to the company generally ranges between €8,500 and €9,500, depending on the applicable parameters. The gap between the net amount received and the employer cost is significant, and this is often what drives executives to look for alternatives.

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This cost includes contributions for health insurance, old-age pension, supplementary retirement, disability/life insurance, CSG, and CRDS. Each of these contributions grants specific rights, which is the fundamental difference between social charges and taxes: taxes are a levy without direct individual return, whereas contributions fund concrete protection.

The cost of dividends in a SAS

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In a SAS, dividends paid to the president are not subject to social security contributions, regardless of the amount. This is a fundamental difference compared to a SARL, where dividends exceeding 10% of the share capital are subject to TNS (self-employed) contributions. Dividends are subject to a 30% flat tax (PFU), which consists of 12.8% income tax and 17.2% social levies. 

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On the surface, it is less expensive than a salary. However, dividends can only be distributed if the company generates a profit after corporate income tax has been paid. The real cost must therefore account for corporate tax upfront, which significantly changes the calculation.

Why comparing salary and dividends solely on tax criteria is misleading

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A euro paid as salary costs more in social contributions, but it grants social security rights and reduces the company's taxable income. A euro distributed as dividends is lighter in terms of tax, but it provides no social protection and requires a profit that has already been taxed at the corporate level.

An honest comparison goes beyond just looking at the effective tax rate. 

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It incorporates the total cost (corporate tax + flat tax for dividends, social contributions + income tax for salary), the value of accrued benefits, and the impact on the company's cash flow. This comprehensive simulation exercise is what allows for informed decision-making regarding the compensation of a SAS president.

How do you choose between salary and dividends for a SAS president's compensation?

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First, define the necessary baseline of protection

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Before thinking in terms of taxes, you must ask a simple question: what level of social protection does the executive consider acceptable? A SAS president who pays themselves only a minimum salary and supplements it with dividends ends up with very low pension rights, no significant daily allowances, and reduced insurance coverage.

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The minimum baseline depends on your personal situation. A 35-year-old executive in good health with no children has different needs than a 55-year-old executive preparing for retirement. Establishing this baseline first prevents you from building a compensation package that is tax-optimized but personally risky.

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Simulate several quantified scenarios

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The decision cannot be made using a general rule. It is built by testing concrete scenarios: 100% salary, 100% dividends, and, most importantly, intermediate combinations. For each scenario, you must calculate the total cost to the company, the net disposable income for the executive, the social benefits accrued, and the household income tax.

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The break-even point varies depending on the level of profit. For a company generating €80,000 in profit before compensation, the trade-off is different than for a company at €250,000. Tax bracket thresholds, social security contribution caps, and the 40% deduction when opting for the progressive tax scale create threshold effects that must be modeled precisely.

Consider the executive's medium-term plans

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A SAS president planning a real estate investment within the next two years needs high reported income to convince a bank. In this case, maximizing dividends at the expense of a salary can jeopardize securing financing, as banks struggle to factor dividends into borrowing capacity calculations.

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Conversely, an executive preparing to sell their company in three years may find it beneficial to limit withdrawals to maximize cash flow and, consequently, the company's valuation. The compensation of a SAS president is not an isolated parameter: it is part of a broader strategy that must evolve alongside the executive's plans.

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What mistakes should be avoided regarding SAS president compensation?

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Paying yourself zero euros in the first few years

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This is the most common reflex in a SASU: the executive pays themselves nothing to "preserve cash flow." During this time, they do not earn any pension quarters, do not contribute to any funds, and are not entitled to any benefits in the event of sick leave. If this situation lasts for two or three years, catching up is impossible: the unearned quarters are lost forever.

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Even a modest salary (a few hundred euros per month) allows you to earn pension quarters and maintain coverage under the general social security scheme. The cost is often marginal compared to the protection provided.

Freezing your compensation without ever re-evaluating it

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Contribution scales change every year. Social security ceilings are adjusted. CSG rates can be modified. Employee savings schemes are reformed. Compensation calibrated in 2022 is not necessarily optimal in 2026.

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The right approach is an annual review, ideally before the end of the fiscal year. This review allows you to adjust the salary/dividend mix based on the company's actual results, legislative changes, and the executive's evolving personal situation.

Confusing the SAS regime with the SARL regime

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Generalist articles often conflate the two statuses. A SAS executive who follows advice intended for a majority manager of a SARL risks making poor decisions. Dividends for a SAS president are not subject to social security contributions, whereas those for a majority manager of a SARL are, for amounts exceeding 10% of the capital. 

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This single difference radically changes the trade-off.

Similarly, provident schemes, Madelin contracts (reserved for self-employed individuals), and deduction methods do not function the same way depending on your status. Every piece of advice must be verified against the executive's exact status.

Setting the compensation for a SAS president with Virtus Expertise

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Determining the compensation for a SAS president is about more than just choosing between a salary and dividends. It is a comprehensive balancing act that impacts the executive's social security coverage, household taxation, and company cash flow.

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Virtus Expertise supports SAS presidents in this decision-making process: analyzing the current situation, simulating financial scenarios, implementing the chosen compensation structure, and conducting annual reviews to adjust the strategy. The goal is to find the balance between controlled costs, appropriate coverage, and alignment with your personal goals.

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Are you a SAS president who has never had your compensation modeled? Contact Virtus Expertise for an assessment and identify what you could adjust for the next fiscal year.