How do I pay myself?
A Simple Method:
From the Money Coach for Entrepreneurs, Gina Knox
Unquestionably, one of the most common questions I get asked by entrepreneurs and small business owners is ‘how do I pay myself?’
From how much to how often to what percentage should be reinvested back into your business, navigating these questions can leave you feeling overwhelmed and frustrated that you can’t enjoy all of the fruits of your labor.
There are two main ways to pay yourself:
A salary, where you would regularly pay yourself how you would if you were working in a typical 9-5pm. This is applicable for S-corporations and C-corporations.
Or an owner’s draw, where as the business owner you draw from the profits of your business (on an as-needed basis) but you would need to plan for the tax bill later on.
But what if your business isn’t consistently earning income? Or what if you’ve been earning at least a base minimum each month and have slightly more predictability? The most eloquent explanation that we’ve seen so far comes from the ‘Money Coach for Entrepreneurs’, Gina Knox. Images below come from her Instagram page and D&Co has permission to share!
