One option business owners’ have is to include themselves in the payroll system but they have to balance their pay with the financial needs of the business. Have you seriously discussed this with your Bookkeeper Melbourne?

If business owner’ include themselves on the payroll they have to consider the following;

1. How much they pay themselves either in payroll, dividends and loans .

The amount of money they take. Will it be more than the highest paid employee, or an amount that will make them comfortable?

1. When is the time to get the money out of the business?
2. Will it be alright if they will not pay themselves?

The following guide will be of help;

Consider the income flow of your business before considering paying yourself. Investments are necessary for your business to expand and to keep abreast with the pace and developments in the market. Investments can come from the skills of employees. Other investments needs to be in cash. This may be from

1. Financial investment.

Either this comes from you, from directors or from your fellow owners, or maybe from somebody else but has to be paid back on agreed terms.

1. Grants

These are given for specific needs only.

1. Profit

Net income after all expenses like salaries, taxes and other cost have been paid. This can be reinvested in the business.

During the early stage of the business, most cash you get from these sources are consumed, so that the question is where to get the money for your pay. You also need to consider your stake

You-

You also need money for your living expenses and feel that you are running the business instead of vice-versa and have to follow the law.

Your employees- Think how your employees will react to the balance that you choose between their pay, your pay and the requirements of the business.

The business- Consider the growth needs of the business, how will these be supported financially in some other ways. Are there viable plans, taking into consideration the other stakeholders’ needs?

There are no set of rules on how business owners pay themselves. They may have longer hours of work with lesser salary through payroll. Business owners choosing compensation must be able to meet the two key requirements, paying themselves to be comfortable and ensuring the viability of the business by being able to invest in its staff and ensuring its future.