Sole trader or BV: at what profit does switching pay off in 2026?

"Once you make six figures, you need a BV." You hear that rule of thumb everywhere. It was roughly right in 2021, completely wrong in 2023, and it is close again now. We ran the numbers for 2026 using this year's rates: where the break-even point actually sits, why it has moved twice since 2021, and which four factors can shift your personal break-even point by tens of thousands of euros. Note upfront: this is a worked example for orientation, not tax advice.

This is not financial advice. This article is general information with a worked example for orientation. It is explicitly not tax, legal or financial advice and no rights can be derived from it. Your partner, your pension, losses carried forward and your longer-term plans can change the outcome completely. Have a tax adviser look at your situation before converting anything.

The short answer: around € 120,000 profit

Using 2026 rates and the minimum director's salary of € 58,000, a BV starts to leave you with more net income than a sole proprietorship (eenmanszaak) at roughly € 120,000 profit per year, assuming you actually take all the profit out privately.

Add the running cost of a BV (annual accounts, corporate tax return, payroll administration for yourself: easily € 1,500 to € 3,000 a year) and that moves up to € 129,000 to € 138,000.

Leave most of the profit inside the BV instead, to invest or build a pension, and the point drops sharply: to € 73,900 if you count the money in the BV at face value, or to about € 107,000 if you deduct the latent 24.5% box 2 claim up front. That gap is exactly why you hear such wildly different rules of thumb, and there is a whole section on it below.

In short: if you live off your profit, the break-even point sits between € 120,000 and € 140,000. If you are using the BV to build wealth, the advantage starts somewhere around € 70,000 to € 107,000. Which number applies to you depends less on your profit than on what you do with it.

This is purely about tax. Liability, investors or a future sale can make a BV sensible at much lower profits. More on that below.

Why "six figures" is such a persistent rule

The € 100,000 figure dates from the days when the self-employed deduction was over € 7,000 and a director could set their salary 25% lower using the efficiency margin. Since then both sides have moved, in opposite directions.

Read that table left to right and you see two forces pulling against each other:

• The sole proprietorship got more expensive. The self-employed deduction fell from over € 6,000 to € 1,200 in five years, and the SME profit exemption from 14% to 12.7%. That pushes the break-even point down, which is what the "it is much lower now" stories are pointing at.
• But the BV got more expensive too. In 2023 the efficiency margin was abolished, raising the customary salary sharply, and the first corporate tax bracket went from 15% to 19%. In 2023 the break-even point shot up to around € 240,000.

What pulls it back in 2026 is the low first box 2 bracket: the first € 68,843 of dividend is taxed at 24.5% instead of 31%. On a typical dividend that saves around € 4,000, which brings the break-even point back to roughly where it stood in 2021.

So the six-figure rule was about right in 2021, useless in 2023, and slightly off today: it is closer to € 120,000 than € 100,000, and certainly not lower.

How the two routes are taxed

As a sole proprietor the entire profit lands in box 1, but only after three deductions:

• the self-employed deduction of € 1,200, if you meet the 1,225 hour criterion;
• the SME profit exemption of 12.7% on what is left;
• then the box 1 brackets (35.70%, 37.56% and 49.50%) plus a 4.85% income-related healthcare contribution on up to € 79,409.

The general tax credit and the labour tax credit both taper off above € 30,000, so your marginal burden is higher than the headline bracket rate. See the guide on tax deductions for freelancers.

As the director-shareholder of a BV it runs in two stages:

• you pay yourself a customary salary of at least € 58,000, taxed at normal box 1 rates with 4.85% healthcare contribution withheld;
• whatever the BV keeps is profit: 19% corporate tax up to € 200,000, and 25.8% above that;
• pay it out as dividend and box 2 applies on top: 24.5% up to € 68,843, 31% above that.

The self-employed deduction, starter deduction and SME profit exemption all disappear. As a director-shareholder you are no longer an entrepreneur for tax purposes, you are an employee of your own company.

The sums at € 120,000 profit

Right at the break-even point both structures leave you with virtually the same amount:

A difference of € 34 on € 120,000 of profit. That is not a coincidence, it is the definition of the break-even point, and it shows how flat the curve is around it.

Across a wider range:

Two things stand out. First, the advantage stays modest: between € 120,000 and € 200,000 of profit it is worth € 2,000 to € 3,000 a year. That is the same order of magnitude as the extra accounting costs, which is why the real break-even point sits closer to € 130,000 than € 120,000.

Second, it flips back at the top. Above roughly € 290,000 profit the sole proprietorship wins again if you keep distributing everything, because you run into 25.8% corporate tax and 31% box 2 at the same time. In practice almost nobody distributes everything at that level, so treat that second crossover as a warning against blind extrapolation.

Four things that move your own break-even point

1. Your customary salary. The € 58,000 is a floor, not a default. The main rule is the salary in the most comparable employment, so if your market pays € 85,000, that is your number. Every extra euro of salary moves profit out of the cheap corporate rate and into box 1:

2. What the BV costs each year. A BV needs annual accounts, filing with the Chamber of Commerce, a corporate tax return and monthly payroll filings for yourself. At € 1,500 of extra cost the break-even point is € 129,000; at € 3,000 it is € 138,000. Incorporation itself (a notary, minimum capital of € 0.01) is a one-off few hundred euros.

3. Whether you need the money privately. By far the biggest lever, bigger than the other three combined. Big enough to deserve its own section: see below.

4. What else is going on at home. A partner without their own income can take part of the dividend at the low box 2 rate (for tax partners the first bracket runs to € 137,686 combined). Losses carried forward, an annuity or pension plan, a mortgage or a large investment can all tip the balance.

The other rule of thumb: € 70,000, if you leave the money in

If someone tells you a BV already pays off at around € 70,000 of profit, they are almost certainly assuming the profit stays inside the company. And they are right: with a director's salary of € 58,000, that crossover sits at € 73,900.

The reason is the marginal burden above your salary. Out of every extra euro of profit above the director's salary you keep:

81 cents against 51.7 cents is a huge gap, and that is where the € 70,000 comes from.

There is a catch: those 81 cents are not yours yet. A 24.5% box 2 claim sits on top. Account for it and the 81 cents drop to 61.2 cents, moving the crossover from € 73,900 to € 106,700.

So who is right? It depends entirely on what you do with the money.

• If you take it out within a few years to live on or to buy a house, the claim is simply deferred tax and € 107,000 is the honest number. You moved your tax bill, you did not shrink it.
• If the money genuinely stays put, to invest or reinvest, the BV really does win from around € 70,000. You invest 81 cents instead of 51.7 cents, and the returns are taxed at 19% corporate tax rather than 36% in box 3.

That second effect is larger than people expect. Take € 30,000 of profit above your salary, a 6% annual return, left alone for fifteen years:

The range on that last line comes down to valuation. The main rule for securities held in a BV is cost or lower market value, meaning gains are taxed only when you actually sell, which stretches the deferral further. Certain fund structures, including a stake in an exempt investment institution, must instead be marked to market every year. Ask your adviser which regime applies to your portfolio before counting on this.

So over € 10,000 of difference, rising to € 14,000 or € 18,000 after twenty years. Anyone who treats a BV mainly as a savings and investment vehicle is right to quote € 70,000. Anyone who needs every euro to live on each month is not.

One caveat: the advantage scales with profit, and the € 58,000 customary salary is fixed. Everything above it is what you can set aside:

At € 70,000 of profit the BV is indeed better, but at € 9,720 a year it takes a while to notice. The strategy only really gets going once substantially more than your salary comes in.

One practical condition on that € 73,900: you have to be able to afford it. At € 70,000 profit with a € 58,000 salary you live on roughly € 40,000 net and park € 9,720 in the company. If you cannot miss that, the scenario is theoretical and the € 120,000 figure applies.

What the sums leave out

The break-even point is a tax number, and the decision is not. Reasons to consider a BV much earlier:

• Liability. In a sole proprietorship your private assets are on the line for business debts. With large contract values, staff or design risk, that often outweighs a few thousand euros of tax. Note that a bank will usually still ask for a personal guarantee, and improper management makes you personally liable anyway.
• Investors and co-owners. Only a BV can issue shares. If you ever want someone to buy in, or to sell part of the business, a BV is the only practical vehicle.
• Succession and sale. Selling a BV as a share package is a very different, and often more favourable, exercise than winding up a sole proprietorship.
• Uneven profits. A BV lets you smooth the peaks: retain in a strong year, distribute in a weak one. A sole proprietorship settles every year at that year's rate.
• Social security. As a director-shareholder you are usually not insured for unemployment or disability benefits. You are not buying a safety net, only a different tax burden.
• Where you park the wealth. Invest from the same BV that runs your business and your portfolio is exposed to that business's creditors, which cancels the liability benefit for that part. The usual answer is a holding structure: a working BV for the revenue and a holding company above it where the wealth lands, with the participation exemption letting profit move up untaxed. That does cost a second set of accounts and returns.
• Borrowing instead of distributing. If you are thinking "I will distribute nothing and simply borrow from my own BV", the excessive borrowing rules apply: above € 500,000 owed to your own company, the excess is taxed as box 2 income, measured on 31 December. A qualifying mortgage on your own home is excluded.
• Perception. Some clients insist on a BV, often because of false self-employment rules. For the record, a BV does not automatically solve that.

And in 2027?

The phase-out continues. The self-employed deduction drops to € 900 in 2027 and the € 2,123 starter deduction disappears entirely on 1 January 2027, with no transitional arrangement. Feed those two changes in while keeping 2026 rates otherwise, and the break-even point falls from € 119,700 to about € 118,000.

That is the nuance behind the story that "a BV pays off ever sooner": the direction is right, but the pace is a few thousand euros a year, not tens of thousands. The big jumps in this file came from the customary salary and the box 2 rates, not from the self-employed deduction.

If you do switch: watch the deadlines

There are two ways to convert, and both have a date you do not want to miss.

• Taxable contribution (ruisende inbreng). You settle up on the cessation profit, the hidden value and goodwill in your business, and start with a clean slate inside the BV. An annuity can soften the blow. To make it retroactive to 1 January 2026, the declaration of intent has to be registered and the BV incorporated by 30 September 2026.
• Tax-neutral contribution (geruisloze inbreng). Under article 3.65 of the Income Tax Act you do not settle up; the tax claim moves across to the BV. Conditions apply, including holding the shares for three years. For retroactive effect to 1 January 2026 the declaration of intent must reach the tax authorities by 1 October 2026 (the date they receive it counts, not the date you send it) and the deed must be signed by 31 March 2027.

Which route is cheaper depends on the hidden reserves in your business and on your longer-term plans. This is exactly the point to bring in a tax adviser: the sums above tell you whether it pays, an adviser tells you how.

What to do now

1. Check that the profit is structural. One exceptional year above € 120,000 is not a reason to switch; the costs and paperwork run for years. Look three years ahead, not three months back.
2. Run your own numbers. The break-even calculator lets you enter your own profit, director salary, BV costs and payout plans and shows your break-even point straight away. If you only want to know what you net today, use the freelance income calculator.
3. Decide how much you genuinely need privately. That single figure moves the break-even point by tens of thousands.
4. Get three quotes for BV administration. The annual cost is not a detail, it is about the size of the entire tax advantage near the break-even point.
5. Keep reserving properly until then. As long as you are a sole proprietor you pay the tax afterwards. See setting money aside for tax or use the tax reserve calculator.

Finq tracks your profit and your tax reserve all year, so come November you are not guessing whether you landed above or below that break-even point.

Frequently asked questions

At what profit does a BV pay off?

With 2026 rates and a € 58,000 director salary, around € 120,000 of profit if you take everything out privately. Include the annual running cost of a BV and it is € 129,000 to € 138,000. Leave the profit inside the company to invest and the advantage starts at around € 74,000. Run your own numbers with the break-even calculator.

When should I set up a BV?

For tax reasons: only once your profit is structurally above that break-even point, so across several years rather than one exceptional one. For non-tax reasons it can make sense much earlier, for instance with large contract values, staff, liability risk, or an investor who wants shares.

What is the minimum director salary in 2026?

€ 58,000 a year. That is a floor, not a default: the main rule is the salary in the most comparable employment, which can be higher. A higher customary salary pushes the break-even point up considerably.

What does a BV cost per year?

Budget € 1,500 to € 3,000 a year for the annual accounts, the corporate tax return, filing with the Chamber of Commerce and payroll filings for yourself. Incorporation at a notary is a one-off few hundred euros; minimum capital is € 0.01.

Can I switch back from a BV to a sole proprietorship?

You can, but it is more work and more expensive than the way in: the business has to come out of the BV and the BV then has to be dissolved, with a box 2 settlement on whatever it holds. So do not count on an easy way back if profits disappoint.

Sources

The break-even points in this article were not lifted from other publications but calculated here: for each profit level the net result of a sole proprietorship was set against the net result of a BV, using the same logic that powers the break-even calculator. The rates that go into it come from:

• Corporate tax, box 2, customary salary, self-employed deduction and SME profit exemption 2026: KVK, tax rates 2026
• Healthcare contribution and maximum contribution income 2026: Rendement and Salaris Vanmorgen
• Self-employed deduction in 2027 and the end of the starter deduction: Ondernemersplein (Dutch government)
• Deadlines for taxable and tax-neutral contribution: Moore DRV
• Box 3 rate and the counter-evidence rule: Rendement
• Valuation of securities inside a BV: ABN AMRO Financial Focus and MRVO
• Excessive borrowing rules, 2026 threshold: Finny

Checked afterwards against the break-even points quoted by Sarabel (€ 100,000 to € 120,000) and Finny (€ 110,000 to € 140,000). Our result falls inside both ranges. Where those articles quote different rates, the KVK figures were used.

Calculated in August 2026 using 2026 rates: self-employed deduction € 1,200, SME profit exemption 12.7%, box 1 at 35.70% / 37.56% / 49.50%, healthcare contribution 4.85% on up to € 79,409, customary salary € 58,000, corporate tax 19% up to € 200,000 and 25.8% above, box 2 at 24.5% up to € 68,843 and 31% above. All amounts are rounded and assume one entrepreneur without staff, without partner income and without a mortgage. Rates and thresholds change every year; have your own situation calculated before converting anything.