Bookkeeping Tip for Entrepreneurs: How to Pay Yourself the Right Way
If you're a sole proprietor or single-member LLC, one of the biggest questions you’ll face is:
"How do I actually pay myself?"
Is it like a paycheck? A transfer? Is it taxable?
Let’s break it down simply.
What Is an Owner’s Draw?
An owner’s draw is when you take money out of your business account for personal use. You’re not an employee of the business—you are the business. So instead of a salary, you're drawing from your profits.
Draws themselves aren't taxed at the time of withdrawal. Instead, your net income from the business (after expenses) is reported on your personal tax return, and that’s what gets taxed—even if you don’t pull all of it out.
Best Practices for Paying Yourself:
Keep your accounts separate. Never mix personal and business money.
Transfer clearly labeled draws from your business to your personal account (use the correct category in QuickBooks).
Create a consistent routine. Treat it like a paycheck—weekly, biweekly, or monthly.
Know your numbers. Don’t drain your account—leave funds for taxes, operations, and future growth.
📌 Want help setting this up in QuickBooks the right way?
Schedule a free 30-minute call with Dr. Bryan Raya:
https://calendly.com/dbr_bookkeeping/30-minute-zoom-consultation-call
Or join the DBR Bookkeeping Online Community to learn from other entrepreneurs mastering their money:
https://www.skool.com/dbr-bookkeeping-8561/about
Let’s make sure you pay yourself right—and keep more of what you earn.
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