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Personal Owner Pay? How do you figure?

CARMandP

By CARMandP
in Human Resources, Employees

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GeeZ

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If you have been in business for awhile, you know what your net profit margin is, so I would use this as my guide. Depending what your type of business formation, you can save fica, futa, suta fees by taking anything over your set salary as dividends. You must use a salary that is similar to someone in your position (manager). You must be a LLC or Corporation (S or C corp).

 

Example: your net profit is $150K and a shop manager in your area makes about $50K. You set your salary at 50K and at the end of the year, you

take a 100K dividend. You only pay FICA, SUTA, FUTA based on the 50K and save the the other fees.

 

Also, giving yourself a regular salary doesn't necessary make you more money, but it gives you a more accurate picture of your business. Are you really

making more money by being self-employed or are you just buying yourself a job with a lot of headaches.

 

Not sure if this answers any of your questions.

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