When should a business owner be entitled to salary?

[abubakar3141]

If you are the sole employer, you are not an employee and you do not receive a salary in the form of a permanent salary. No FICA tax (Social Security / Medicare) is deducted and no federal or state income tax is withheld. By withdrawing money from a business, a single individual becomes an "owner"

 

[Kinglegend01]

I dont think it is proper to term taking money from your own business as stealing, although am not in support of this because I agree with you that it is too early and i think the best time to be receiving your salary from your business is when it is developed and fully stable.

 

[akinlolu99]

an entrepreneur might be profiting by their business and that can be their own compensation yet there is no unique game plan for the proprietor of a specific business to have a compensation or benefits on the grounds that the business is heavily influenced by him and he can choose the amount he really need to procure in a month.

 

[Victor001]

It takes certain level of discipline to avoid scenarios like this, most people learn in the business.learning in the business by accepting the fate of their carelessness or guilt trip that comes from funds misuse.

 

[IamDozzy]

To me, a business owner taking out of the business earnings for personal projects at an early stage of the business is STEALING FROM THE BUSINESS.

A business owner who wants the business to grow won’t be tempted to use the business earnings for personal projects. The owner should be entitled to salary when the business is having steady cash flow.



Have you been stealing from your business?

Valid points you gave. It is always advisable for profits made to be re invested to the business. That way the business would be able to grow and expand resulting in a steady cash flow. Most business owners aren't disciplined enough to abide by this principle. But I have a question, what happens in the event of an Emergency?.

 

[Segshowee]

To me, a business owner taking out of the business earnings for personal projects at an early stage of the business is STEALING FROM THE BUSINESS.

A business owner who wants the business to grow won’t be tempted to use the business earnings for personal projects. The owner should be entitled to salary when the business is having steady cash flow.



Have you been stealing from your business?

Every business owner is entitled to take out of the profit generated by his business for taking care of personal needs or other needs as it may require. Whatever he decides to take out of the profit should not be outrageous in such a way that the business would be affected.

 

[MarieArie]

@MarieArie Proper calculations? like what and what do you consider when making such calculations. It is normal to eat where you labour no doubt, but you shouldn't kill the business at such an early age. A farmer who labour planting will at least wait for a period of time to harvest.

That's exactly the point. I meant proper calculations in the sense that you don't spend when you've not started getting returns. No sane person will spend actually capital or capital designated to be used for the promotion of the business.

 

[Bangiszz]

There's where self-restraint assumes a more significant part than in setting your own compensation. As the proprietor and author of your business, you can assign so a lot or as little of the organization's benefits as you need to your own check. You can even choose to go further: You can advise your bookkeeper to write you a check equivalent to the whole month's deals. That will be a high-water mark for your profit, nonetheless, since depleting that much money will guarantee that it's your last month in business.

There are two gatherings of invested individuals in the choice about the amount to pay yourself. To start with, you need to do directly by your accomplices (assuming any), workers, providers, lenders and clients. In the event that you remove cash from your organization for yourself, to the degree that any of these gatherings are harmed, it very well may be a mix-up.

Yet, you likewise need to see yourself as (and maybe your mate and your kids), just as any admirable missions you uphold out of your profit. These invested individuals merit a reasonable cut of the abundance, as well. You ought to get a good profit for the work and danger you have contributed. Your family ought to, obviously, share in those advantages.

 

[Sunny cent]

As a sole proprietor, you don't pay yourself a salary and you cannot deduct your salary as a business expense. Technically, your pay is the profit (sales minus expenses) the business makes at the end of the year. You can hire other employees and pay them a salary. You just can't pay yourself that way. An alternative method is to pay yourself based on your profits.

 

[Dubai]

I disagree with this, a business owner must be on a salary, if he needs extra money it should be taken out as a loan, no professional accountant or auditor will support this as it upsets the accounting system and makes it disorganized.

He doesn't need to be salary in my opinion. However, he must have a record of what ever money he takes from the business one a while. This money would even be replaced at times as probably he took it for a product that would have an impact on the first business.

 

[Atiqurrehman]

You should only pay yourself, not your revenue, out of your earnings. Don't assume you can pay yourself a big slice of that when you see money flowing into your company. You will need to take items like taxes, payroll, fixed costs and overheads into account before you take your share.

 

[Blessedsam60]

You have just said it all. The proper time for a business owner to be entitled to paying him self a salary from the business is when the business has grown to some extent and it's kind of more stable in capital and labour, then the owner can now estimate how much to be paid.

 

[Muhammadawais]

Therefore, keep $100,000 in resources in your bank account if you receive and spend approximately $100,000 per month. However, I usually recommend keeping three times the number of monthly cash flow within your bank account if you work in a company whose revenue ebbs and flows according to seasons.

 

[Mazhar Malik]

As a business owner, when should you start paying yourself, and how much do you pay yourself? Here is what the experts had

 

[Aotosyno]

This is the reason why most businesses crashes today,in business you have to be disciplined you don't put your hands into the business money if you must do it should be something that will bring back profit or help the business move forward that is where discipline comes.

 

[Ezzyoj]

Definitely, a business owner deserves salary at some stage of the business, so many businesses run down because of lack of fund management. A business can start taking salaries from the business when it has reach a particular target set. That should be when the business is no longer under threat of finance problems

 

[Abdul Naveed]

You can pay employees weekly, bi-weekly, part-time or monthly. How will you pay the employees? Many employers pay employees directly using the deposit, but you can also pay employees by paper check or pay card. In order to pay employees the right amount, you need to know how much to deduct from employees' wages.

 

[Irfanali]

Draw single proprietors

If you are the sole employer, you are not an employee and you do not take the form of a regular salary to a salaried employee. No FICA tax (Social Security / Medicare) is deducted and no federal or state income tax is withheld. By withdrawing money from the business, a single individual becomes an "owner".

 

[Anas Chaudhary]

You just have to be more discriminating with the help you render toward other people. When you see money coming into your business, don't think that you can afford it. Before you get your cut, you also need to take into account things like taxes, payroll, fixed expenses and overhead.

 

[Hasan Raza]

I concur, I think it is the most fundamental mix-up that entrepreneurs make, opposing the compulsion to dunk your hands into the assets implied for business. That is the reason it is imperative to have an alternate type of revenue, while you permit the business to develop.