paying yourself

Discussion in 'Business Operations' started by Lawn Dad, Sep 1, 2007.

  1. Lawn Dad

    Lawn Dad LawnSite Member
    Posts: 2

    How do you guys pay yourself? Do you just take from the money that is brought into business or do you pay yourself a set hourly wage?

    I am starting my own landscape/lawn care business and curious about what you guys find works best. I have had my own fencing business when I lived out west and we paid ourselves an hourly wage.

    Thanks for your time.
  2. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Posts: 3,466

    It's pretty much the same way. Depending on how your business is set up.Maybe at the end of the year give your self a bonus .
  3. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    what ever you do pay yourself first. whether you set it up as a salery or pay yourself an hourly wage.
  4. Grass Happens

    Grass Happens LawnSite Senior Member
    Posts: 682

    Sense I am SP i just use owners draw out of my equity account. I dont make nearly enough money now to worry about the effects on my balance sheet. However, in a couple of years, I'll probably just pay myself a small salary and figure out what to do with the rest before the end of the year.
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Gross - expenses = net - taxes = profit, which is mine to do with as I wish.

    I tried all that salaried / hourly crap, man you need a full-time employee just to deal with the taxes for that crap, I was hating life.
    So yeah, I just pay 30% taxes on the net and draw what I need from the profit.
    Way easy, bit more costly but not really.
  6. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    I tried that but projecting what I will make at the end of the year is more than mind boggaling. I pay myself 1500 a month and take a bonus at the end of the year if it allows. Break downs, new equiptment and fuel are hard to project. either you way over estimate or you are under estimating. Science maybe but figure if I make 18000 a year I can still pay bills. hopefully there is a bonus, so far all but one year. Yeah 18000 isn't much but since truck, utilities and a ton of other things are written off each year 18000 is quite a bit for a profit. Now most years land a 15-20g bonus but you never know until may the next year.
  7. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Pay myself a % of the net at the end of the month.
  8. Lawn Dad

    Lawn Dad LawnSite Member
    Posts: 2

    thanks all that responded so far, it has been informative.
  9. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    I live my life as always regardless of what the bank account balance is. I pay my rent and I pay my credit are debited. This leaves more in the bank to use as I wish for the company. Cash on hand for 'what if' and to purchase say the T190. If I spend it I can't use it when I want.

    At the end of the year I total it up and I see what I have paid myself thus far. Hand it over with other #'s to my accountant. He then sees where I am at and gives me some options. Take on debt and save taxes......purchase. Another is pay myself more, say a bonus.

    Just depends what he says to benefit me the most. One thing we all should be doing is maxing out a ROTH IRA every year....$4,500.
  10. RedWingsDet

    RedWingsDet LawnSite Gold Member
    from Detroit
    Posts: 3,556

    I pay myself hourly. Plus that way you can get unemployment in the winter and you dont have to dip into your business account to buy grocerys or anything like that (if your forgot to save in the fall). Business account is always seperate from personal expenses.

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