Tips on How to Pay Yourself from Your Business
If you’re a business owner, you’re wearing a lot of hats—and some days, it feels like they’re all on fire. Between chasing clients, putting out daily fires, and keeping the lights on, one thing often gets overlooked: paying yourself.
Now, I’m not talking about dipping into the till whenever you feel like it. That’s the kind of move that leaves your books looking like a bar tab at closing time. I’m talking about a plan—a steady, intentional way to make sure you’re rewarded for the work you put in while keeping your business healthy.
Here are a few ways to do it right:
1. Pay Yourself a Salary
Think of this like putting yourself on the payroll. You decide a set amount you’ll earn every month, just like any employee. This keeps your books clean, helps with budgeting, and makes tax time a whole lot easier. If you’ve got a “bookkeeper near me” worth their salt, they’ll tell you this is one of the simplest, most consistent ways to go.
2. Take an Owner’s Draw
If your business structure allows it—like a sole proprietorship or partnership—you can take money directly from the profits as needed. It’s flexible, sure, but it takes discipline. A good set of books (and maybe some small business bookkeeping help) will keep you from accidentally bleeding your business dry.
3. Use Profit Distributions
For corporations or LLCs, you can pay yourself through profit distributions. This is more of a reward for the business doing well, not a paycheck. It’s a solid way to enjoy the fruits of your labor without upsetting the regular cash flow.
4. Contribute to Retirement
Future-you will thank you for this one. Whether it’s a SEP IRA, Solo 401(k), or another plan, paying yourself into retirement is still paying yourself. A freelance bookkeeping services pro can help figure out the best approach so you keep more of your hard-earned money.
Bottom line? Paying yourself isn’t selfish—it’s survival. If you treat it like an afterthought, you’ll always be scrambling. But if you plan it, budget it, and track it, you can keep your business running smooth and still take home what you’ve earned.
Need help setting up the right system? I can help you get the numbers straight so you can focus on running your business instead of running yourself ragged.