What should you pay yourself?

Discussion in 'Business Operations' started by Lawn-Scapes, Jun 6, 2008.

  1. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    Is there a certain percentage that any business owner should pay themselves no matter the size of the company?
     
  2. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Tht depends on what hats the owner is wearing. If the owner is also the foreman he would make a reasonable foremans wage then hopefully there is something left for profit. Which you could choose to take but if you want to grow thats where the profits wil go.

    I don't think you will find an industry avg if there is you could check with PLANET they do a yearly thing and gather that kind of info but I question how accurate it is because I don't think many participate.

    You can take all the profit and stay the same size or you can take what you need to live and reinvest. Most guys I know that are owners no matter what the size 500-K to 10 million per year volume take a salery of 100-150-K per year between them and the wives and reinvest the rest for growth.
     
    tbtigers likes this.
  3. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,532

    Im an s corp. I take $800 a week and draw the rest a profit. Taking too much in a paycheck kills you with comp, taking too little isnt good come tax time.
     
  4. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    It depends if you take it for tax reasons, or to give yourself the impression that the company makes more than it does. I dont take a salary.
     
  5. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    AI - you and I keep finding too many similarities with our biz. Yes, I'm and S-corp as well, pay myself a little less than the 800 a week, and write myself dividend checks when needed.

    To the OP, no real percentage, but try to reinvest as you go instead of just dumping it all in your pocket. I learned that a little late. Equipment, land, shop/garage, whatever. Even invest it in good people to work for you.
     
  6. Two Seasons

    Two Seasons LawnSite Senior Member
    Posts: 791

    S-Corp here too.

    Pay myself as little as possible as we have some power equipment debt that we are getting behind us. My wife, and co-owner, draws no salary yet.
     
  7. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    i only make min wage so i also draw welfare and get food stamps. haha!
     
  8. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,837

    Whats a paycheck?//
     
  9. TLClandscaping

    TLClandscaping LawnSite Member
    Posts: 59

    I take 30% right off the top for taxes, seems high but you want to be over and not under and placed in a sub-account or your business savings account, works for me.

    Payday falls on when the job is done, im a SP soon LLC
     
  10. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Posts: 5,407

    I am s-corp... I only pay myself 25k a year... the rest is business profit. Isn't that the whole point of being an s-corp... avoid ss?
     

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