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How Do I Pay Myself from My Business?

Greg Swanson

If you're asking how do I pay myself from my business, you're not alone—many new owners struggle to figure out what’s legal, smart, and sustainable.

Quick answer: How you pay yourself depends on your business structure. Sole proprietors and LLCs often take an owner’s draw, while corporations typically use payroll for an official salary.

Understand Your Business Type

Sole Proprietor: You can take an owner salary by simply withdrawing profits as a draw—no formal payroll needed.
LLC: Similar to a sole proprietorship unless taxed as an S Corp, in which case you'll need to run payroll.
Corporation: C Corps and S Corps typically require formal payroll with tax withholdings for business owners working in the company.

Decide on Amount and Frequency

Set a Schedule: Consistency is key—weekly, biweekly, or monthly payments help with budgeting.
Review Your Finances: Base your payment on actual business income distribution and leave enough in the account for expenses and taxes.

Use the Right Method

Owner’s Draw: Just transfer money to your personal account, but keep good records.
Payroll: Use payroll software to handle taxes and stay compliant.
Profit Distributions: S Corp owners can take distributions beyond their salary, often with tax advantages.

Paying yourself is both a reward and a responsibility. Choose a method that matches your business type and income flow, and always plan for taxes.

Updated: August 12, 2025

Can I pay myself directly from my business bank account?

Yes, if you're a sole proprietor or single-member LLC, you can transfer money directly as an owner's draw. Keep detailed records for tax purposes.

Do I have to run payroll for myself?

If you’re taxed as an S Corporation or run a C Corporation, you must run payroll and withhold taxes, even if you're the only employee.

How much should I pay myself from my business?

Only take what the business can afford. Consider your role, business profits, taxes, and growth goals when deciding on an amount.

Can I take both a salary and profit distributions?

Yes, if you're an S Corp owner, you can take both a reasonable salary and additional profit distributions, which may be taxed differently.