You pay yourself a manager's salary: does the file hold up before the tax and social security authorities?
In short: A partner-manager can be paid: article 67 of the Algerian direct tax code expressly classifies "income allocated to partners and managers of limited liability companies" as salaries and wages. The difficulty lies elsewhere. On the tax side, article 169-1) point 6 refuses the deduction of remuneration "which does not reward work or a service performed, or the amount of which is excessive". On the income tax side, the 40 % allowance applies to the tax and not to the base, capped at 1.500 DA a month. On the social security side, no Algerian text we read names the manager: the majority-or-minority criterion is imported from French law. And the current-account shortcut runs into article 46-4, which treats advances to partners as distributed income. This article works through the file, document by document.
Keywords in this article
1. Does a partner-manager draw a salary, or something else?
The commercial code never mentions the manager's salary. It deals with his appointment. Article 576 provides that a limited liability company "is managed by one or more natural persons", chosen from among the partners or from outside, appointed in the articles of association or by a later instrument. Article 577 then grants him, towards third parties, "the widest powers". What these two provisions describe is a corporate mandate, not a job.
Labour law points the same way. Law no. 90-11 of 21 April 1990 builds the employment contract on subordination: a worker performs under an employer's authority. A manager decides. He answers to no one in the exercise of his management, and he therefore enjoys none of the employee protections in that capacity.
Tax law goes the other way. Article 67 of the direct tax code (CIDTA) classifies as salaries and wages "the income allocated to partners and managers of limited liability companies, to partners of partnerships, professional civil companies and members of joint venture companies". The same article adds "the allowances, reimbursements and lump-sum expense payments made to company directors".
What to take from this apparent contradiction. The word "salary" here is a tax label, not a social security label. It governs personal income tax and nothing else. It says nothing about which fund the manager pays into, and that is where the most common confusion on the subject begins.
| Situation | Link with the company | What the payment rests on |
|---|---|---|
| Partner-manager | Corporate mandate plus partner status | Decision of the partners |
| Non-partner manager | Corporate mandate alone (art. 576) | Decision of the partners |
| Partner who does not manage | Partner status alone | Dividend, or an employment contract if he holds a real post |
| Employee | Employment contract, subordination | The contract and the payslip |
So a manager can be paid. The question was never whether he has the right. It is what makes that payment hold up when an inspector looks at it.
2. What does the manager's right to be paid rest on?
The limited liability company chapter of Book V sets no term of office, no age limit and no ceiling on the manager's pay. That silence is not a gap. It hands the decision to the body of partners, which is competent for everything the law does not reserve to itself.
Two articles frame the operation. Article 582 sets the majority: decisions are adopted by one or more partners representing more than half the share capital. Article 583 requires the record: "every deliberation of the meeting of partners is recorded in minutes". Those minutes are not a comfort formality. They are the single document that separates decided remuneration from a personal withdrawal in a tax officer's eyes.
Articles of association, or minutes?
Many founders want the amount written into the articles, believing this secures it. The opposite happens. Under article 586, amending the articles requires partners representing three quarters of the capital. An amount fixed in the articles therefore forces that majority to be gathered at every review, even for a 10 % increase.
The arrangement that works has two layers. The articles open the principle, by providing that management may be remunerated on terms set by the partners. The minutes then fix the amount, the effective date and the frequency. The first is rarely amended, the second as often as needed.
The single-member company
In a single-member limited liability company, the sole partner's decision replaces the minutes of a meeting. Its legal value is the same. Its evidential weight is weaker: the manager decides his own pay alone, with no one to object. That is why the decision must be dated, signed, and earlier than the period it pays for.
From our engagements. In the practice we observe, the most frequent defect is not a missing decision. It is a decision drafted after the fact, on the day the file goes to audit, covering pay drawn for two financial years. Minutes dated in the current year do not repair payments made in earlier ones.
3. When can the administration refuse to deduct this remuneration?
The chain of provisions is short, and it is worth knowing in order. Article 141-1) of the CIDTA allows the deduction of "general expenses of any kind, the rent of buildings leased by the business, staff and labour costs", and immediately adds: "subject to the provisions of article 169".
Article 169-1) lists what is not deductible in determining net taxable profit. Its point 6 targets our subject expressly:
"Remuneration paid to partners or directors which does not reward work or a service performed, or the amount of which is excessive."
Two conditions, and they are cumulative. The remuneration must reward work or a service actually performed. And its amount must not be excessive. Neither is proved by the minutes alone: minutes prove the decision, not the reality of the work nor the measure of the amount.
| What weakens the file | Condition at stake | What strengthens it |
|---|---|---|
| A manager who signs nothing, travels nowhere, appears in no document | Work performed | Signed contracts, correspondence, filings, travel records |
| A dormant or loss-making company paying substantial remuneration | Amount not excessive | Proportion held against turnover and headcount |
| Exceptional pay decided at year-end that absorbs the result | Both | A stable amount, decided at the start of the period |
| A charge booked, never paid, never declared | Work performed | A named bank transfer and matching filings |
The consequence, when a condition fails, goes beyond refusal of the deduction. The reinstated amount bears corporate income tax and the penalties attached to it, even though personal income tax has already been withheld on the same sum in the manager's hands. One amount, taxed twice, in two different estates.
In a single-member company the burden of proof is heavier. The manager contracts with himself, and the two conditions of article 169 are assessed without the check that a second partner provides.
4. How much income tax does a manager's pay really bear?
Because the payment falls under salaries and wages, it follows the scale in article 104 of the CIDTA, and the company withholds at source. One methodological point governs the whole calculation, and it is regularly inverted.
The 40 % allowance applies to the tax, not to the base. The text provides for "a proportional allowance on total tax equal to 40 %", and caps it: the allowance may not be less than 12.000 DA per year nor more than 18.000 DA per year, that is between 1.000 and 1.500 DA per month. Applying 40 % to the taxable base instead of to the tax distorts the payslip from the first dinar.
| Annual taxable income | Monthly equivalent | Rate |
|---|---|---|
| Up to 240.000 DA | Up to 20.000 DA | 0 % |
| 240.001 to 480.000 DA | 20.001 to 40.000 DA | 23 % |
| 480.001 to 960.000 DA | 40.001 to 80.000 DA | 27 % |
| 960.001 to 1.920.000 DA | 80.001 to 160.000 DA | 30 % |
| 1.920.001 to 3.840.000 DA | 160.001 to 320.000 DA | 33 % |
| Above 3.840.000 DA | Above 320.000 DA | 35 % |
On top of that, salary or wage income not exceeding 30.000 DA per month is fully exempt, a rule the tax administration attaches to articles 5 and 68 of the same code.
The calculation on 200.000 DA
The illustration below takes gross monthly remuneration of 200.000 DA and assumes the manager is covered by the employee scheme, hence subject to the 9 % withholding. It applies the scale above.
| Step | Rule | Amount |
|---|---|---|
| Gross remuneration | Amount set in the minutes | 200.000 DA |
| Social security withholding | 9 % of gross | − 18.000 DA |
| Income tax base | Gross less the withholding | 182.000 DA |
| Tax before allowance | Scale applied band by band | 46.660 DA |
| Allowance | 40 % of the tax, capped at 1.500 DA a month | − 1.500 DA |
| Tax withheld | Tax less the allowance | 45.160 DA |
| Net paid to the manager | Gross, less withholding, less tax | 136.840 DA |
On the same gross figure the theoretical 40 % allowance would come to 18.664 DA. The cap brings it back to 1.500 DA. Above roughly 8.700 DA of monthly tax the allowance stops tracking pay and becomes a flat reduction.
On the filing side, the company withholds the tax and remits it through the monthly G50 return. Article 75 of the CIDTA further requires an annual statement, on electronic media or by e-filing, produced before 30 April and setting out for each beneficiary the gross amounts and the withholdings made.
One last rule, usually discovered late: the withholding falls due as soon as the remuneration is earned by the manager, even if the net has not left the company's account. Pay booked and unpaid suspends neither the tax nor the contributions.
Have the payslip checked before it becomes evidence
Calculation of the tax withheld, social security classification of the manager, drafting of the minutes and matching of the filings. Pre-flight check: we look at the file before the administration does.
Have my file reviewed5. CNAS or CASNOS: which text settles the question?
This is the weakest point in the file, and it deserves to be said plainly: we found no Algerian text in force that names the manager of a limited liability company or a single-member company and assigns him to either fund.
What exists is two well-defined schemes, and a manager named in neither.
| Employee scheme (CNAS) | Self-employed scheme (CASNOS) | |
|---|---|---|
| Founding text | Executive decree no. 94-187, rewritten by executive decree no. 15-236 of 3 September 2015 | Executive decree no. 15-289 of 14 November 2015, article 14 rewritten in 2026 |
| Scope | Workers bound by an employment contract | "Non-salaried persons carrying on an activity on their own account" |
| Rate | 34,5 % of gross pay: 25 % employer, 9 % employee, 0,5 % social works | 15 % of declared income: 7,5 % social insurance, 7,5 % pension |
| Who pays | The company, for both shares | The person concerned |
What the July 2026 decree changed
Executive decree no. 26-257 of 15 July 2026, published in Journal officiel no. 53 of 23 July 2026, rewrites article 14 of decree no. 15-289. It keeps the rate at 15 %, split into 7,5 % for social insurance and 7,5 % for pension. The rate has not moved, contrary to what has been read here and there since the summer.
What the text reformulates is the contribution base. It "may not be lower than the amount of the guaranteed national minimum wage and may not exceed twenty (20) times the annual amount of that wage". The decree also opens, exceptionally and to encourage self-employment, a flat annual contribution option of 24.000 DA for the auto-entrepreneur.
With the guaranteed national minimum wage raised to 24.000 DA, or 288.000 DA a year, the minimum contribution for a self-employed person comes to 43.200 DA a year, and the maximum to 864.000 DA on declared income capped at 5.760.000 DA.
The rule "majority manager to CASNOS, minority manager to CNAS" has no basis in the Algerian texts we read. It comes from French law, where the split does depend on the share held in the capital. Decree no. 15-289 contains no list of categories naming managers, and its criterion is carrying on an activity on one's own account. We found no circular or instruction from either fund settling the question.
The practical consequence is easy to state and uncomfortable to live with: on a file that matters, the classification is requested in writing from the fund concerned before the first payslip is issued, and the answer goes into the permanent file. A manager paid without being declared anywhere gets the worst of both schemes. He builds no entitlement, and the company is exposed to a reassessment of contributions with late penalties.
The uncertainty can also be handled upstream, when the corporate form is chosen. Our article on legal form and turnover shows why that choice does not follow from the volume of activity.
6. Paying the manager through his current account: what does article 46 say?
The shortcut is tempting and common: rather than open a payroll cycle, the manager transfers a sum from the company to his personal account each month, and the accountant books it to the partner's current account. Article 46 of the CIDTA closes that shortcut.
That article lists income treated as distributed. Its point 2 covers "sums or values made available to partners, shareholders or unit holders and not taken from profits". Its point 4 is blunter still: "loans, advances or payments on account made available to partners, directly or through an intermediary person or company".
A partner's current account that stays in debit, fed by regular monthly transfers, falls squarely within that definition. The consequences stack up. The sum is not a charge, so it does not reduce the result; and it is treated as distributed income, with the withholding that follows.
| Operation | Nature | Effect on the result |
|---|---|---|
| Management remuneration decided and declared | Staff cost | Deductible, under the two conditions of article 169 |
| Dividend voted on approved profits | Allocation of the result | None, since it is taken after tax |
| Repayment of a credit current account funded by a genuine contribution | Repayment of a debt | None, since it is not income |
| Monthly transfers on a current account in debit | Advance to a partner (art. 46-4) | None, plus reclassification as distributed income |
One point deserves to be cleared up, because it circulates the other way. The limited liability company chapter of Book V contains no civil prohibition on lending to the manager: the prohibition in articles 628 and 671 applies to joint-stock companies and their executive boards. The obstacle is not in the commercial code. It sits in article 46 of the tax code, and that is enough on its own.
The choice between the exit channels is not settled here. It is covered, with figures, in our article Taking money out of your company: what each channel really costs, which compares remuneration, dividends, the current account and the sale of shares.
7. Which documents must exist before the first payslip?
Seven documents, in this order. None of them can be produced afterwards without losing part of its value.
The decision, dated before the period
Minutes of a meeting for a multi-partner company, a sole partner's decision for a single-member one. It carries the amount, the effective date, the frequency and a description of the duties entrusted to the manager. That description is what will later answer the first condition of article 169.
The social security classification, settled before the first payslip
CNAS or CASNOS, with the fund's written position on files that matter. Until this point is settled, the payroll cycle does not open.
A full payroll cycle
Monthly payslip and payroll register, even for one person. In the accounts, the charge goes to 631 with a dedicated sub-account for the manager's remuneration, employer contributions to 635, the liability to 421, the contributions to 431 and the tax withheld to 442. The charge never goes straight to 455.
Tax filings
The monthly G50 return for the tax withheld, then the annual statement of salaries and wages before 30 April, under article 75 of the CIDTA.
Social security filings
Registration of the employer and the insured person, periodic returns and payment on time, with receipts kept. A spotless tax file and an empty social security file contradict each other, and the contradiction shows.
Payment by named bank transfer
A clear reference, in the manager's name, every month. Untraced cash destroys the proof of payment, which is the first item checked.
The year-end close
If the net has not been paid, it stays in account 421 and the withholdings remain due. Any transfer of it to the current account is decided in writing. And the current account balance is watched: once it turns into debit, article 46-4 takes over.
The matching rule. Five documents must tell the same story, with the same amounts and the same dates: the minutes, the payslips, the annual salary statement, the social security returns and the bank statements. A gap between any two of them is the usual entry point of an audit, and the only one that no oral explanation gets you out of.
FAQ — Frequently asked questions
Sources and references
- Ordinance no. 75-59 of 26 September 1975 on the commercial code, Book V "Commercial companies", as amended — art. 576 (management by one or more natural persons, partners or not, appointed in the articles or by a later instrument), art. 577 (powers), art. 582 (majority of more than half the capital), art. 583 (minutes required), art. 584 (accounts within six months), art. 586 (amendment of the articles at three quarters of the capital). The limited liability company chapter sets no ceiling on the manager's remuneration and no prohibition on lending to him — the prohibition in arts. 628 and 671 applies to joint-stock companies and executive boards — Ministry of Trade and Export Promotion · Verified on 13/09/2026
- Direct tax code (CIDTA) — art. 46 (distributed income: point 2, sums or values made available to partners and not taken from profits; point 4, loans, advances or payments on account made available to partners, directly or through an intermediary person or company), arts. 66 and 67 (salaries and wages: income allocated to partners and managers of limited liability companies; allowances, reimbursements and lump-sum expense payments made to company directors), art. 75 (withholding at source and annual statement produced before 30 April) — Directorate General of Taxes — text published by the Institute of Banking Training · Verified on 13/09/2026
- Direct tax code (CIDTA) — art. 141-1) (general expenses and staff costs allowed as deductions "subject to the provisions of article 169") and art. 169-1) point 6 (not deductible: "remuneration paid to partners or directors which does not reward work or a service performed, or the amount of which is excessive") and point 7 (directors' fees and shares of profits) — Directorate General of Taxes — text published by the Institute of Banking Training · Verified on 13/09/2026
- Law no. 20-16 of 31 December 2020 on the finance act for 2021 — art. 17 amending article 169 of the direct tax code (current structure of the article: 1) non-deductible charges, 3) repealed, 4) related expenditure) — Journal officiel of the Algerian Republic no. 83 of 31 December 2020 · Verified on 13/09/2026
- Direct tax code (CIDTA) — art. 104: progressive income tax scale in six bands (0 %, 23 %, 27 %, 30 %, 33 %, 35 %) and a proportional allowance of 40 % applying to total tax, which "may not be less than 12.000 DA/year or more than 18.000 DA/year (that is between 1.000 and 1.500 DA/month)". Scale in force as recast by the finance act for 2022 — Directorate General of Taxes · Verified on 13/09/2026
- Directorate General of Taxes — income tax / salaries and wages page: full exemption of salary or wage income not exceeding 30.000 DA per month (arts. 5 and 68 of the direct tax code) — Directorate General of Taxes (DGI) · Verified on 13/09/2026
- Executive decree no. 94-187, rewritten by executive decree no. 15-236 of 3 September 2015 — breakdown of the social security contribution rate: 34,5 % of gross pay, of which 25 % borne by the employer, 9 % by the employee and 0,5 % for social works — Journal officiel of the Algerian Republic / CNAS · Verified on 13/09/2026
- Executive decree no. 15-289 of 14 November 2015 on social security for non-salaried persons carrying on an activity on their own account — scope and article 14 (contribution base and rate). The text contains no list of categories naming company managers — Journal officiel of the Algerian Republic no. 61 of 18 November 2015 · Verified on 13/09/2026
- Executive decree no. 26-257 of 15 July 2026 amending executive decree no. 15-289 — new article 14: "The contribution rate is set at 15 % of the base referred to above; allocated as follows: 7,5 % for social insurance; 7,5 % for pension"; the base "may not be lower than the amount of the guaranteed national minimum wage and may not exceed twenty (20) times the annual amount of that wage"; annual contribution option of 24.000 DA open to the auto-entrepreneur — Journal officiel of the Algerian Republic no. 53 of 23 July 2026, pp. 7-8 · Verified on 13/09/2026
- Presidential decree no. 26-01 of 7 January 2026 raising the guaranteed national minimum wage to 24.000 DA — floor for pay and reference for the self-employed contribution base. Reference carried over from our article on hiring a first employee; the Journal officiel text to be attached at the first review — Presidency of the Republic / Journal officiel · Verified on 13/09/2026
- Law no. 90-11 of 21 April 1990 on labour relations, as amended — definition of the employment contract based on subordination, which is absent from the exercise of a management mandate — Journal officiel of the Algerian Republic · Verified on 13/09/2026
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