Paying Yourself as a Small Business Owner

Paying yourself as a business owner: watch the video for advice on paying yourself as a small business owner .

I cover various issues regarding payroll for startup companies in Tennessee. One of the first, and most important, things you need to make sure you understand and do correctly is how to pay yourself as the business owner.

The first step is to identify the type of entity your company is. If you’re an LLC and you have no employees, then you don’t need to set up payroll for yourself. You can simply transfer money from your business account to your personal account to pay yourself. You do of course need to be careful with this. You should set up a budget to establish control over the withdrawals that you make.

If on the other hand your company is a corporation, you do need to set up payroll. Shareholders of corporations pay themselves through payroll instead of taking withdrawals like an LLC owner.

As I go over in the video, there are many ways to do payroll. You can hire a payroll company to issue your payroll, try to do it yourself or have a CPA do it.

It is possible to do it yourself if it’s not very complex. In that case you can just use a spreadsheet. I go through an example in the video showing you what categories you need for a spreadsheet: gross pay; net pay; payroll tax liabilities; employer and employer social security; and employer Medicare tax, both of which are tax deductible by the way. I go into these categories in depth. So watch the video to learn about how to pay yourself as a business owner.