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Banned
Join Date: Apr 2005
Location: Usa
Posts: 3,621
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Advice on paying yourself as a business owner
I know a lot of you run your own show. I am now with a partner for a couple months and I haven't taken a salary yet. Receivables are starting to come in and I'm wondering how/when you guys take a salary, take a draw, etc. Seems like some say pay yourself first, others say pay yourself last, if there's anything left. I know a lot depends on the levels of our payables vs receivables, but I'm just lookin' for input from you guys ithat have been doing this for a while...thanks,
Christian. www.hartlanddigital.com |
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06-27-2009, 06:19 PM
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What is the structure of the business entity? LLC, Chapter-C, etc. There are tax implications for you and the business. Have you contributed capital (cash) or in-kind (equipment) to the balance sheet?
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Don Plumley M235i memories: 87 911, 96 993, 13 Cayenne |
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06-27-2009, 08:54 PM
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Cogito Ergo Sum
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I know my parents take a monthly salary check once a month.
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06-27-2009, 08:57 PM
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I'm with Bill
Join Date: Feb 2005
Location: Jensen Beach, FL
Posts: 13,028
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When I first started my business, I got paid first, I was the sole employee and I was not doing it so I would not get paid.
As the business blossomed and the money was good, I paid myself and them some. When business made a turn for the worst with the failing economy, I stopped taking paychecks, as of right now I have cut my salary 50% since this time 3 years ago. My only advise to you is to get a CPA and bounce your questions off of him, he/she should be doing your taxes anyway, payroll services are cheap and leave you to concentrate on running the business not the paperwork. MY CPA does not do his own Land Surveys and I do not do my tax work.
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1978 Mini Cooper Pickup 1991 BMW 318i M50 2.8 swap 2005 Mini Cooper S 2014 BMW i3 Giga World - For sale in late March |
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06-28-2009, 06:08 AM
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The Unsettler
Join Date: Dec 2002
Location: Lantanna TX
Posts: 23,885
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Quote:
Car Repair Billing Problem, Advice Needed
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"I want my two dollars" "Goodbye and thanks for the fish" "Proud Member and Supporter of the YWL" "Brandon Won" |
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06-28-2009, 06:28 AM
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Registered
Join Date: Jan 2002
Location: Long Beach CA, the sewer by the sea.
Posts: 37,797
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As a sole proprietor, you can live and work out of one checkbook. With a partner, you should have had an agreement from day one as to what the salaries would be. I'll have to cast a vote for getting paid last.
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06-28-2009, 07:00 AM
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Bollweevil
Join Date: Dec 2003
Location: Fulshear, Texanistan
Posts: 3,361
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As a partner in a software business for 30+ years, we partners were the last to get paid and more than once did not get paid in the early going. We always paid our suppliers and our employees first. Without them, you will shortly have no business.
Milt has it right: in a partnership who gets paid what and when and many many other issues should be agreed upon in writing when you form your partnership or ASAP thereafter.
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Jack 74 911 Coupe 2.7L - K21 Option - S suspension |
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06-28-2009, 08:47 AM
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Registered
Join Date: Mar 2001
Location: Marysville Wa.
Posts: 22,478
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keyword: partner. one guy always does less than the other and expects the same pay.
basically you need to take the minimum pay that will get you by.
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https://www.instagram.com/johnwalker8704 8009 103rd pl ne Marysville Wa 98270 206 637 4071 |
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06-28-2009, 08:53 AM
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Registered
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At the end of the day I just take what I need out of the till. Having a partner would complicate things.
Jim
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down to jap bikes that run and a dead Norton |
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06-28-2009, 09:52 AM
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1987 Porsche Carrera 3.2 
1986 Porsche 944 2.5l
the stable a few years ago
2013 
