Ways to Pay Yourself from an LLC
- Drawing Income
- Receiving a Salary
- Combination Method
Multi-Member LLC Payment Rules
For a single-member LLC, owners can take draws from profits, while partners in a multi-member LLC divide draws and distributions.
Suggested Percentage for Paying Yourself
Aim to allocate 5% – 10% of your take-home pay towards savings goals. Initiating small monthly savings can build a positive habit.
When to Start Paying Yourself as a Business Owner
Begin paying yourself when the business starts generating profits, i.e. revenue exceeds expenses.
Legal Methods to Pay Yourself as a Small Business Owner
Withdraw cash from the business account as profit, which is taxed annually.
Determining the Best Payment Method from an LLC
Owners commonly receive income through owner’s draws or salaries, depending on the LLC type and tax status.