How should I pay myself?
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- Category: EMERGING ENTREPRENEUR | $300K - $2M
In the beginning, you should be careful how you pay yourself.
The business has to be stable, from a revenue perspective, and you must acquire (and sustain) reliable vendors and customers before you can pay yourself routinely…if you must.
Right now you want to minimalize your personal expenses because you don’t want to be a financial strain on the business. You can almost always distribute money quarterly or semi-annually, if necessary, to meet your personal needs in the high growth phase.
Remember, you (as the business owner) must be the smallest financial drag on the business as you possibly can be.
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Should I put my spouse on the payroll?
Your answer here is dependent on your household tax bracket. Placing your spouse on your business payroll is primarily a tax play to potentially minimize your tax rates.
As such, you should only put your spouse on the payroll if your goal is to help reduce tax rates or fund a retirement plan. Just remember, your spouse does need to earn a reasonable rate of income for the duties they are performing for the business.
Don’t settle for content that isn’t customized to your specific situation. Enter your email address below to have a deeper conversation with a Gerber team member about the appropriate approach to tackle this issue.
Should I put my kids on the payroll?
Your answer here is dependent on your household tax bracket. Placing your child on your business payroll is primarily a tax play to potentially minimize your tax rates.
As such, you should only put your kids on the payroll to reduce tax rates or fund a retirement plan. Just remember, your child does need to earn a reasonable rate of income for the duties they are performing for the business.
We’re here to help. Enter your email address below to talk with a Gerber team member and help ensure you have all the info you need to make a profitable decision for your business.
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