If you’re a sole proprietor with no employees and very little business overhead, what you pay yourself is pretty much what you earn in sales minus your costs and taxes. But what happens when your business grows, or you enter a partnership, or take on employees – how do you determine what your salary should be?
As a business owner, setting your own salary can be a tricky task, especially in markets that see highs and lows. Here are a few tips to help you determine the best way to "pay the boss.”
There is no magic formula for setting your salary because so much depends on the development stage of your business and how it’s doing. For example, if your business is still in startup phase, your salary may still be essentially what’s left over after your operating costs and bills have been paid – and this may not be a lot.
But if your business has shown consistent profit, then you should feel free to take a percentage of those profits, or set a salary for yourself in accordance with industry and regional standards.
Read the whole article at SBA.gov.
Through the Michigan Chamber’s partnership with WageAccess, you can gain access to valuable Compensation, Benefits, Pay Practices and Incentive Pay information and trends in the State of Michigan, and across the United States. Learn more about discounts offered to Chamber members.