How much should you pay yourself?

Being the boss means you get to make all the big decisions about your business – including how
much to pay yourself in wages, salary or drawings.

As the owner, you might need to underpay yourself in the early stages of building your business,
so you can reinvest the profits. But your time is valuable – and you need enough money to pay
the bills. So how can you find the right level of pay? It has to be enough to keep the mortgage
paid, while also building a thriving business.

If you’re trying to decide how much to pay yourself, here are a few questions to ask yourself:

What can the business afford? 

You need to leave enough cash in the business to
keep it ticking along, pay your basic costs, and meet your tax obligations. Once you’ve
considered all those outgoings, how much does that leave you as a potential salary? We
can help you work out what that number is, so you can establish a sustainable rate of
pay.

What’s the market rate for your role? 

What would you have to pay someone to do the work you’re undertaking in this business? Maybe you wouldn’t actually be able to find anyone to work the same long hours, but if you were hiring someone with your experience, to do the same sort of work for 40 hours a week, what would they expect to
be paid? That number is a good starting point for thinking about your own salary or
drawings. If you’re being underpaid, it’s time to think about ways to grow your profits. If
you’re being overpaid, congratulations on building a highly profitable business!

Could reinvesting profits grow your income faster? 

You can take all the profits out of your business, which should give you a strong and sustainable income. Or, could you reinvest your profits and grow the business faster, leading to a higher income in the long-
term? You might choose to spend some of your profits on advertising, a better website, or
developing a new offering, for example. Or you could pay for assistance in some area of
the business. If the investment leads to higher growth, it might be well worthwhile.

We’ll help you run the numbers

We can help you figure out how much your business can afford to pay you, analyse the potential
gains of a business investment, or weigh up the pros and cons of hiring someone to help you.

Get in touch, we’d love to hear from you.

Book a Complimentary 1 Hour Consult

What our clients say

Brilliant team. Extremely helpful and professional business attitude.

Mehernosh Kotwal

The team at DFKOGC is incredibly knowledgeable and experienced in the field of accounting. They took the time to thoroughly understand our financial situation and provided tailored solutions that perfectly suited our business needs. Their attention to detail and accuracy in handling our accounts give us complete peace of mind. On behalf of Maungakiekie Golf Club, I wholeheartedly recommend DFKOGC to anyone in need of professional accounting services.

Hugo Littlejohn

Very efficient and has a personal touch. If you have questions, they respond in a timely manner and even visits you to explain things face to face.

Marlo Camacho

We have been dealing with the team at DFKOGC since last 10 years and we have always found them to be very professional and supportive to all our accounting needs.They do have full range of professionals available in the team to cater for all the accounting related Services and very responsive to all the client requirements.

Munish Singla

DFK have supported us for many years and the service has been great across various partners.

MAHA Australia & New Zealand

My Company has been utilising the services of DFKOGC for many years and this itself speaks volumes for the excellent professional services rendered by them. I have been interacting with the DFKOGC team for the past 2 months and I have found them to extremely responsive, very professional and always willing to go the extra mile to service us.

Mary Abraham
Previous
Next