The 40% abatement applies to the tax, not to the base
This is the most common mistake, and it distorts the payslip from the first dinar. Article 104 of the CIDTA provides for 'a proportional abatement on the overall tax equal to 40%'. The abatement therefore applies to the computed tax, never to the taxable base. And it is bounded: no less than 12,000 DA and no more than 18,000 DA a year, that is between 1,000 and 1,500 DA a month.
The consequence shows quickly. Above 3,750 DA of monthly tax, 40% would exceed the cap: the abatement stays at 1,500 DA and stops following the remuneration. It becomes a flat reduction, and the effective rate moves closer to the raw scale as pay rises.
The 30,000 DA threshold is a cliff, not a slope
Salary income not exceeding 30,000 DA a month is exempt from IRG. The exemption is total below the threshold and nil above it: there is no transition zone. A gross of 30,001 DA therefore leaves less in hand than a gross of 30,000 DA, and about 31,040 DA is needed to recover the same net.
The reverse calculation accounts for this: as long as the requested net stays below the exempt net, the calculator answers with a gross inside the exempt zone rather than a higher gross that would leave less. The social security withholding remains due in every case.
Salary or dividend: the comparison belongs before tax
Comparing a net salary with a net dividend says nothing useful, because the two amounts do not come from the same place. Remuneration is an expense: it reduces taxable profit, subject to the two cumulative conditions of article 169-1) 6° — it must pay for work actually done, and it must not be excessive. A dividend comes out of profit already taxed to corporate tax, and then bears the final withholding.
So the only comparable question is: how much pre-tax profit must be consumed to put the same amount in hand? That is what the table shows. And the figure does not settle the matter: a dividend presupposes a realised profit, a closed financial year and a meeting approving it, whereas remuneration is paid month by month.
Frequently asked questions
Read next
- The full file: manager's pay, the tax authority and the funds
- Taking money out of your company: what each channel really costs
- Transferring dividends abroad: the procedure and the withholding
- 100,000 DA net a month: the turnover you need
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