Are you paying yourself too little?

7oa6ZtAhCEKrSp4hHTSd0E sbg social 018 1

You probably didn’t get into business just to make money, but it is (and should be) part of the equation. Getting your salary right is an important part of a healthy business. Pay yourself too little and your bills will go up as your motivation goes down. Too much, and you might be at risk of breaking the law – many countries have rules around how much business owners in different sectors can take out.

So, how do you decide on your salary?

The aim is to arrive at a figure close to the industry standard for your role and size of organisation.

The first piece of the puzzle is getting a clear understanding of your numbers – your revenue and expenses.

Then, look into your local market to find out what you would pay someone to take over from you. You might start by looking through job ads that match your role, asking other business owners what they pay themselves, and comparing those figures with what you’re currently paying your staff.

The legal structure of your business may impact how you pay yourself and you’ll also want to think about the most tax-efficient way to withdraw funds.

If you’re in growth mode and you just don’t think your business can afford to pay you market value, you have some options, like creating a written agreement to pay yourself later.

Get expert advice

Whatever figure you land on, we’re here to help. We’d be happy to give you our feedback, along with helping you structure your pay to maximise tax benefits.

Source https://www.xero.com/au/resources/small-business-guides/business-management/pay-yourself/

Acro Accounting & Financial Planning (AAFP) offers a one stop solution right from accounting, taxation, financial planning to other business advisory services. As Certified Practicing Accountants (CPA’s) and professional tax advisors, we pride ourselves on being experts with the latest developments relating to business and taxation. We as professional public practice firm, provide high quality taxation and business advice to our clients through a personalised service at competitive rates.

Related Articles

Understand Your Revenue Drivers | Quick Guide
How well do you understand your revenue drivers? We can help you review the numbers in your business, identify your revenue drivers, and will help you enhance your total revenue as a company.
Need help for your September quarter activity statement?
Your September quarter activity statement is due soon. Are you ready? We can help prepare your BAS or review your business accounting systems.
Direct Debits and Online Payments Set Up for Your Business
Do you have direct debits and online payments set up to make it easy for your customers to pay you? Talk to us today about implementing online payment systems to reduce admin time, improve the accuracy of your accounts and get paid quicker.
How Accountant's In-Depth Financial Data Improves Business Decisions
Enhance your business decisions with detailed financial insights from an expert accountant. Learn how it empowers informed choices and drives success.