Parnter salary in firm

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This discussion clarifies that partner salaries are not compulsory in a firm, even if it's profitable or partners have made significant capital contributions. Payment of salaries is entirely dependent on the partnership agreement. If the agreement doesn't specify salaries, none need to be paid, regardless of profit levels or capital invested.

binu sukumaran

binu sukumaran (Querist)
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16 October 2025 sir.
Let's me know , whether partner salary is compulsory if firm is profit.
In a firm there is two partner and they contribute ( capital ) is more than profit .
Please advise
with regards
Binu

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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16 October 2025 Salary or remuneration to partners is only payable if allowed by the partnership agreement, and there is no statutory requirement to pay salary just because there is profit or high capital contribution.

Profit is distributed among partners based on the agreement, and capital contribution can influence profit sharing but does not mandate a salary.

If there is no mention of salary in the partnership deed, none need be paid, regardless of profits or capital put in.

Tax law only limits deductions for partner salary if paid, but does not require payment.

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binu sukumaran

binu sukumaran (Querist)
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24 October 2025 sir.
Thanks you for valuable information

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 October 2025 You are welcome.

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