How to Pay Yourself the Right Way as a Small Business Owner

If you’re a sole proprietor or run a single-member LLC, chances are you’ve asked:
"Can I just transfer money to myself?"
The short answer? Yes—but there’s a right way to do it.

Understanding how to pay yourself as a business owner is essential for keeping your finances clean, your taxes under control, and your stress levels low—especially around tax season.

Let’s break it down for you 👇

💰 Best Practices for Paying Yourself as a Sole Proprietor or LLC

✅ Open a Separate Business Bank Account
Your business isn’t your personal piggy bank. Separation protects you legally and financially—and makes bookkeeping 10x easier.

✅ Take an Owner’s Draw (Not a Salary)
As a sole proprietor or single-member LLC, you don’t put yourself on payroll. You simply transfer profits from your business account to your personal account. That’s called an owner’s draw.

✅ Use Reports to Decide How Much to Pay Yourself
Don’t guess. Use your Profit & Loss statement to determine what’s safe to take out—without starving your business.

✅ Set Aside Taxes
No one’s withholding taxes for you. Set aside 25–30% of your profits to cover self-employment taxes, federal and state income tax, and quarterly payments.

✅ Consistency is Key
Pay yourself regularly—even if it’s a modest amount. This builds discipline and helps you plan your personal finances.

❓ FAQ: Common Questions About Business Owner Income

Q: Can I pay myself with cash or apps like Venmo?
A: Not recommended. It creates messy records. Always use a business account and make transfers to your personal account for clarity and audit protection.

Q: What’s the difference between “profit” and what I can pay myself?
A: Just because your P&L shows profit doesn’t mean you have available cash. Always check your cash flow report before taking a draw.

Q: How often should I pay myself?
A: Weekly, bi-weekly, or monthly—whatever is sustainable. The key is consistency and making sure you're not draining cash needed for business operations.

🧠 “How you pay yourself says a lot about how you run your business.”
Dr. Bryan Raya has helped dozens of solo entrepreneurs, creatives, coaches, and wellness pros build systems to pay themselves with confidence—and saved them over $200K in taxes in 2025 alone.

📞 Schedule your free call with Dr. Bryan Raya to get your finances clean, your income consistent, and your stress down.

Let’s start Doing Business Right—together.

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