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To pay myself...

6580 Views 30 Replies 18 Participants Last post by  Wolverine, 
K
Honestly guys, I have absolutely no idea how much I make, (or if I make enough)....If I was to say..pay myself a weekly amount, how would I structure it? by the hour?...or by the week?...or day?..
(I work 6 days now) How do all of you do it?
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vermontpainter
Kelly Painting said:
Honestly guys, I have absolutely no idea how much I make, (or if I make enough)....If I was to say..pay myself a weekly amount, how would I structure it? by the hour?...or by the week?...or day?..
(I work 6 days now) How do all of you do it?
Click to expand...

Kelly

I think it depends on the nature of your business entity. If you are incorporated you might pay yourself as a salaried officer. If you are a sole proprietor, you should be cutting yourself a check every week from the business account. Kelly, please tell me there is a business checking account.
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timhag
I draw weekly,same x amount.
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Tonyg
Not quite sure what you are asking for.

If you were to hire an employee to replace yourself how much would you need to budget? Set that as your "salary" and anything above that you take additionally you can consider as profit, a dividend, or invest it back into your business for growth.

Now, if you are not making enough to pay someone to replace yourself then you are not making enough.

For tax reasons as a corp, I have always taken 50% payroll and 50% dividend.
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K
vermontpainter said:
Kelly

I think it depends on the nature of your business entity. If you are incorporated you might pay yourself as a salaried officer. If you are a sole proprietor, you should be cutting yourself a check every week from the business account. Kelly, please tell me there is a business checking account.
Click to expand...

Yes, there is and has been a business account...I've been in business for a
few years now...just never paid myself...just payed the bills and took what I needed to live...(the bills are almost paid off)
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vermontpainter
Kelly Painting said:
Yes, there is and has been a business account...I've been in business for a
few years now...just never paid myself...just payed the bills and took what I needed to live...(the bills are almost paid off)
Click to expand...
I think you should start paying yourself first. You deserve it.
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vermontpainter
Tonyg said:
If you were to hire an employee to replace yourself how much would you need to budget? Set that as your "salary" and anything above that you take additionally you can consider as profit, a dividend, or invest it back into your business for growth.

Now, if you are not making enough to pay someone to replace yourself then you are not making enough.
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Tony

I see what your saying, but I think Kelly would have to hire about 6 people to replace himself.
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C
Personally I my company is a C Corp, so I pay myself like an employee.

At the end of the year I get a W-2 just like the other working stiffs in the world.
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C
I pay myself as much as I can.

I try to give myself a paycheck of the same amount very two weeks.

The C Corp works good for me because I have 6 kids. For now I can make a pretty good amount of money and my taxes are still low.
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K
Sorry...... sole proprietor.
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W
Do you have an operating budget? What does that allow you to pay yourself?
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T
Kelly, you might want to look into an S corp...

And READ that Emyth book!
And Dave Gerstel's "how to run a small construction company."

I KNOW I'm NOT doing so well. Problem is like you, I am unable to review specifics so I can start a program of change that will benefit me in the end.

Economy is gonna be tough for a couple years, so NOW is a good time to get things in proper order!
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Brian
I get paid a fixed salary twice a month and get a W2 at the end of the year.

Brian Phillips
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George Z
Kelly, pay yourself by the hour when you are on the field
and pay yourself your skill level rate.
That part of your pay is part of your direct (job) costs.
Also, pay yourself a salary for running the business (maybe monthly)
that pay is part of your overhead.
You could also pay yourself commission for selling jobs.

instead of getting what is left over,
you can now budget, or even better,
you will eventually find out what it takes to replace yourself
at the above positions.
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H
pay myself every other week, same amount... w2 @ end of year.
kelly the employee should get regular pay and Kelly ,the owner, is a separate entity that makes money when the company is profitable.
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K
Thanks for the info...does everyone else agree that an s corp is the way for me to go?...no employee's on the books just me.


P.S I will read the book..just haven't gotten to it yet...it's definitely on my list.
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K
...no employee's on the books just me.
Click to expand...
So why are you interested in incorporating again? Sole proprietership is the simplest and easiest way to do things if it's just you.
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H
sole p is easy but you leave yourself open to lose everything if something happens. As a single man op, S corp is a good choice. however an attorney should be consulted because there may be better options in your state. the fee will be well worth it.
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PressurePros
My opinion is that everything in business should be done as a corporation for tax reasons as well as liability issues. Its advisable to pay yourself a salary that is reasonable (the rule of thumb to pay yourself what it would cost to replace you is a good one) and when you grow, increase by small amounts and let the company net profit/cash flow grow. If you ever wanted to sell your business, the net profit is what it is going to be based upon.
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DeanV
I would look into an LLC, youy have protection of S-corp but file the same as you do now, I believe.
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