How much can i pay myself?

Discussion in 'Lawn Mowing' started by ItsJoe321, Jul 1, 2005.

  1. ItsJoe321

    ItsJoe321 LawnSite Member
    Messages: 7

    Hey guys first time posting... looking to pick up a set-up here end of this year to begin myself a little company in the spring. I ve been working in the industry for a little over four years now for Pattie Group (check em out, they are awesome) Basically im getting started mowing and gonna be moving into maintainance and installs as time goes on, but im just wondering, How much were you all able to pay yourselves the first year? was it an hourly wage? thanks
  2. mowerman111

    mowerman111 LawnSite Senior Member
    Messages: 327

    When I first started it was day to day living, I would take just enough to put gas in the truck and equipment the rest went toward food and rent etc. we basically lived from day to day. now i still only take what i need the rest goes into the business, my employees always gets paid first. It's funny the more money I make the more my living expenses go up ;) when i first started out my rent was only 150.00 per month now my house payment is 1300.00 go figure. so i guess what i'm saying is there is no # that you can really say that you are going to pay yourself until you know what your expenses are. My payroll is right around 13,000.00 per month. my sales for the month of June was right at 23,000. per month. So the rest has to pay for fuel, repairs etc. i also have to put money out on fertilizer, sprinkler heads and so on for the month until i get reimbursed the next month.
  3. ItsJoe321

    ItsJoe321 LawnSite Member
    Messages: 7

    well hell, i didnt see any room for golf $$$ in there at all! guess i better keep hustling suckers selling them craftsman tractors at sears every weekend until i get comfy... i hate retail, and i sure as hell hate commision but it gets the bills paid payup
  4. yrdandgardenhandyman

    yrdandgardenhandyman LawnSite Senior Member
    from midwest
    Messages: 953

    The way I do it is I take the gross receipts, subtract all costs, ie gas, ins., labor etc, then subtract income tax, accountant fees (if any), a little to put away for equipment maintenance, repair, replace and upgrade, and any other costs I have, and what is left is my salary. Not a lot left at first but it does get better. Expect to lose money for a while.
  5. Lumberjack

    Lumberjack LawnSite Member
    Messages: 180

    It depends on the type of business your running. If its a privately owed one then whatever profits you make = your income. pay your bills but make sure you are reinvesting some in the business.


    If you have incorporated there are many other stratagies. One owner I know paid himself a salary that caused the corporation to declare a loss most years , then he "loaned" the corporation the money to make up for the loss. on years the corporation did show a profit he had it repay the loans. Timing is also plays a part in it as corporate tax years and personal ones are not the same and there are loopholes there that can also be exploited as well.

    There are other forms of pay to look at as well. Health care can be provided by the company which is not taxable income to you and counts as an expense to the business. Many things can be played this way if there is a legit reason. You can rent a room of your house to the business in some cases. If you know someone else in an area your vacationing ing you could swap jobs or arrange a subcontract making the travel a business expense. If you really want to play with the funds do take the time to get a CPA's advice and keep yourself out of trouble.
  6. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    I run as a sole-proprietorship.

    At the end of the year I take my revenues for the year, then subtract all of my bills. Truck payments, equipment payments, equipment costs, repairs, insurances, license fees, etc., come out, then whatever I put on the net revenue line of the 1040 form, that's what I made that year.

    I don't cut myself a check every week, since some weeks there may be a larger expense than I could afford if I cut myself a check for $1,000 or whatever.

    However, if it's my wife's birthday, or our anniversary, or some other occasion where I want to spend some money, I just write the check for whatever amount, and then when I'm doing my books at tax time, that amount goes into the "personal" account and counts against my net revenue for the year. I cannot deduct that account against my revenues as a write-off for the business.

    For me, right now, without being a corporation, it's the easiest way to do it.

    I suppose if I get to where I want the sell the business, I'll probably have to change it, to show a little tighter book.
  7. ItsJoe321

    ItsJoe321 LawnSite Member
    Messages: 7

    thanks for all of the input


    Does anybody have health insurance that you just make the company pay for? that would make things so much easier for me!

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