Sole trader or company? Compare in Excel

What does this tool do?

Who is it for?

• Self-employed people in main occupation whose profit is growing and who want to know whether a company already pays off.
• Starters who are unsure whether to set up a bv right away or to start as a sole trader first.
• Liberal professions and consultants who want to set aside part of their profit for investments or for later.
• Anyone who wants to walk into the accountant’s or notary’s office with their own calculation and the right questions.

What is included?

• Input sheet with the yearly profit, the desired salary and the extra yearly costs of a company.
• Sole trader calculation: social contributions and personal income tax on the full profit, with the net amount.
• Company calculation: salary, corporate tax on the remaining profit and withholding tax on the dividend.
• Overview with the net difference in euros, the total tax burden per structure and a break-even indication.
• Parameter sheet with the tax brackets, the social contribution percentage and the corporate and withholding tax rates.
• Checklist of the non-financial differences: liability, incorporation, bookkeeping and annual accounts.

How do you use the file?

1. 1

   Open the file and go to the “Input” sheet. Only the yellow cells are meant to be filled in.

2. 2

   Enter your expected yearly profit: turnover minus business expenses, before social contributions and taxes. Take last year’s figure as a basis and adjust it to your expectations.

3. 3

   Enter the salary you would pay yourself in the company. An amount of €45,000 is a common starting point, because it is one of the conditions for the reduced corporate tax rate.

4. 4

   Enter the extra yearly costs of a company: the difference in accountant’s fees, the filing of the annual accounts and the set-up costs spread over the number of years you choose.

5. 5

   Choose whether the remaining profit is paid out as a dividend or stays in the company, and choose the withholding tax rate (30 % or 15 % under VVPRbis).

6. 6

   Look at the “Overview” sheet: both structures sit side by side with the net amount, the difference and the break-even indication. Vary the profit on the input sheet to see from which level the company starts to pay off.

Worked example

A self-employed person expects €70,000 of profit, after business expenses and before social contributions and taxes. Simplified assumptions: social contributions of 20.5 % on the profit or the salary, personal income tax according to the brackets of assessment year 2026 (25 % up to €16,320, 40 % up to €28,800, 45 % up to €49,840, 50 % above) without tax-free allowance and without municipal surcharge, 20 % corporate tax, 30 % withholding tax and €3,500 of extra yearly costs for the company. Figures are rounded to the euro.

At €70,000 of profit the company keeps €1,399 more than the sole trader in this example, despite €3,500 of extra costs. With the 15 % VVPRbis rate that becomes €3,979. If you leave the profit in the company to invest, the gap is even larger, because the withholding tax disappears. At a lower profit the balance tips: as long as the profit after salary stays small, the fixed extra costs weigh more than the rate advantage.

Sources & calculation method

This is how the calculation is built:

1. Sole trader: social contributions = profit × contribution percentage. Taxable income = profit − social contributions. Personal income tax = sum of the brackets on the parameter sheet. Net = taxable income − tax.
2. Company, director: the salary follows the same calculation as the sole trader, but on the salary instead of on the full profit.
3. Company, legal entity: taxable profit = profit − salary − extra costs. Corporate tax = taxable profit × rate (20 % on the first €100,000 for small companies that meet the conditions, otherwise 25 %).
4. Dividend = profit after corporate tax, if you choose to pay it out. Withholding tax = dividend × rate. If you choose to retain it, that amount stays in the company and the overview counts it as wealth inside the company, separate from the net amount in private hands.
5. Break-even indication: the file repeats the calculation for a range of profit levels and shows from which level the company’s net exceeds the sole trader’s, for the salary and costs you entered.

Assumptions

• Personal income tax is calculated with the tax brackets of the assessment year on the parameter sheet, without tax-free allowance, without municipal surcharge and without deductions. That overstates the tax at low incomes and slightly understates it by leaving out the municipal surcharge.
• Social contributions are calculated at 20.5 % on the profit or salary up to the first ceiling and 14.16 % on the part above it, without management fees. In reality the calculation is based on the net taxable professional income fixed by the tax authorities, and a minimum contribution applies.
• The reduced corporate tax rate of 20 % assumes a small company that meets all conditions, including a salary of at least €45,000 to a director or a salary at least equal to the company’s taxable income.
• The extra costs of a company are an estimate you enter yourself. Expect higher accountant’s fees because of double-entry bookkeeping and annual accounts, the filing fee at the National Bank and the notary’s fees at incorporation, spread over a few years.

Limitations

• The file is an indicative comparison, not tax or legal advice. Choosing a company has consequences beyond taxes; discuss them with your accountant and notary.
• It does not include pension build-up, VAPZ/PLCI or IPT/EIP, benefits in kind, rent from a property you let to your company, copyright income or a liquidation reserve. Those can tip the balance in favour of the company.
• The file works with a single year. You spread the set-up costs yourself, and the costs and tax consequences of a later liquidation or of contributing your sole trader business to the company are not included.

Sources

This page and the file were last updated on September 24, 2026. Legislation and rates may have changed since.

Frequently asked questions