What Should You Pay Yourself?
Stories abound about how executives at large financial institutions receive big paychecks and multimillion dollar bonuses. As an owner of a small business, these pay packages are way out of your league. But how much should you be earning from your business? Legal, financial, and tax considerations will affect the answer. One of the big misconceptions about owning a business concerns compensation if your business is set up as a sole proprietorship, partnership, or limited liability company. In this case, you are self-employed; you are not an employee of your company and cannot receive a salary. However, this doesn't mean you can't receive regular payments from the business.