How to Pay Yourself the Right Way as a Sole Proprietor
If you're a freelancer, photographer, massage therapist, coach, or any kind of solo service-based business owner, chances are you operate as a sole proprietor—even if you didn’t file anything special with the state.
The question we hear all the time at DBR Bookkeeping:
“How do I pay myself if I’m not on payroll?”
The good news? Paying yourself as a sole proprietor is simple—but it needs to be done the right way to avoid messy taxes and financial stress.
🧾 How to Pay Yourself as a Sole Proprietor
✅ You Don’t Get a Paycheck
Sole proprietors don’t take a salary or W-2 income. You pay yourself through owner’s draws, transferring money from your business account to your personal account.
✅ Use a Dedicated Business Bank Account
Step one: Separate your finances. If you’re still mixing personal and business expenses—stop now. This is critical for clean records and tax time.
✅ Base Your Pay on Profit, Not Sales
You might bring in $8,000/month from coaching or client sessions—but that’s revenue, not profit. Only pay yourself from what’s left after expenses.
✅ Create a “Monthly Owner’s Pay” System
Even if it’s just $1,000/month to start, paying yourself consistently helps you plan personally and run your business like a pro.
✅ Save for Taxes Every Month
No employer is withholding taxes for you—so set aside 25–30% of profits to cover self-employment tax and income tax.
❓ FAQ: Sole Proprietor Payment Basics
Q: Can I use apps like Zelle or Venmo to pay myself?
A: You can, but we don’t recommend it. Instead, transfer money directly from your business account to your personal bank for a clear paper trail.
Q: Do I need to pay myself a certain amount?
A: No legal requirement—but we recommend building up to a regular owner’s pay schedule based on your profit and goals.
Q: I’m not profitable yet—should I still pay myself?
A: Only if your business cash flow allows it. Your #1 priority is to keep the business running. If possible, take a modest draw to reward your effort and stay motivated.
🎯 “Paying yourself gives your business purpose—because you’re not just building income… you’re building freedom.”
At DBR Bookkeeping, we help sole proprietors get clear, organized, and confident in their financial systems—so they stop guessing and start growing.
📞 Book your free call with Dr. Bryan Raya today to set up a custom owner’s pay system that works for your life and your business.
Let’s start Doing Business Right—and paying yourself like a real CEO.
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