Posted by u/confused_founder
How much should I pay myself?
Answered by Ask a Shop Owner ·
Doing about $30k/mo revenue, S-corp, one employee. I take random draws when the account looks fat. Feels reckless. What is the right way?
u/askashopowner Owner-business owner advisor
Top answer
Set a real salary. For an S-corp, the IRS wants reasonable comp for the work you do. Look at what you would pay somebody to do your job (owning aside). For most business owners at your revenue that is $60k to $90k as W-2, plus distributions after.
Practically: pay yourself the same day every two weeks. Same amount. Treat it like any other bill. Distributions come quarterly after you look at cash and taxes, not by feel.
The random draws pattern is the number one reason business owners cannot tell if their business is actually profitable. Fix the salary first, everything else clarifies.
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