Should I Put Myself on Payroll?

Paying Yourself as an Employee of Your LLC

• Once your business starts turning a book profit, that’s when you should start paying yourself.
• When your business is doing well, you might be able to increase your compensation.
• Note: you don’t get an annual Personal Allowance on taxable income over £125,140.
• You should only pay yourself from your profits and not overall revenue.

Setting Up Payroll for Yourself

• Putting yourself on payroll gives you a better idea of what you will owe in taxes.
• As a company director, when you pay yourself a salary, you have to put yourself on the company payroll along with any employees.
• How much to pay yourself in salary versus distributions is controversial.
• You have a few options when it comes to self-employed payroll.

Paying Yourself without Payroll

• Running a successful small business is hard enough; you don’t want to create additional work for yourself in the process.
• Taxes aren’t typically withheld in an owner’s draw, but you’ll still owe them at tax time.
• Business owners can pay themselves through a draw, a salary, or a combination method.