How Much Can I (And Should I) Pay Myself? | NAWBO

By Debra Schifrin, business writer at Stanford Graduate School of Business

Whether you take an owner’s draw or salary, it’s hard to figure out exactly how much you should pay yourself as a business owner.

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We’ll explain what goes into that elusive number so you can learn how to pay yourself like a boss (and ahem, as a boss).

How much can I take as an owner’s draw?

As an owner who takes a draw, you can legally take out as much as you want from your equity as long as you’re a sole proprietorpartner in a partnership or an owner of an LLC that’s taxed as a partnership. For partnerships, each partner’s equity is tracked separately, and each partner can draw funds only up to the amount that they own individually.

Now here’s where things get sticky. If your business is an S corp or C corp (or an LLC that gets taxed as one), there are even more details you need to know about. Here we go!

Read the complete article on the Gusto blog here.
 


About the Author
Debra is a researcher and business writer at Stanford Graduate School of Business. Her business cases are used inside MBA and Executive Education programs at Stanford and other business schools around the country. Debra is a former reporter for National Public Radio and Marketplace and has an MBA from Harvard Business School. Read more