Wondering how much you should pay yourself as a business owner? You’re not alone. Figuring out the right paycheck can feel like navigating a foggy road with no map. Should you take a percentage of your revenue? Pull what’s left over? Or only pay yourself when there’s “extra”?
This isn’t just a financial decision — it’s emotional, strategic, and often avoided altogether. Let’s break it down and give you a simple, confident answer.
Why Paying Yourself Is So Confusing
Most entrepreneurs aren’t taught how to treat themselves as a true stakeholder in their business. You’re wearing 14 hats, chasing client work, and reinvesting like crazy — and suddenly, months go by and you’ve barely taken a paycheck.
It’s not your fault. The traditional advice is vague at best and harmful at worst.
Let me say it louder for the folks in the back:
You are not your business.
And that means you deserve to get paid, not just whatever’s left over at the end of the month.
Let’s Get Real About Owners’ Pay
Let’s clear something up:
It’s Not Your Revenue. It’s Not Your Profit.
If you’ve ever asked, “how much should I pay myself as a business owner?” — you’re really asking, “how do I pay myself first without starving the business?” That’s where the Profit First system comes in.
Revenue refers to the money your business earns. Profit is what’s left over — often after it’s too late to plan. Your Owner’s Pay is something completely different: it’s a line item, a habit, and a non-negotiable if you want a sustainable business.
Profit First and Paying Yourself as a Business Owner
This is where Profit First makes a significant difference. Instead of waiting to see what’s left, you flip the formula: pay yourself first, run the business on what’s left.
It’s not just a system, it’s a mindset shift, one that rewards you as the engine of your company, not the last person to get paid.
The Profit First Formula for Business Owners’ Pay
Here’s the traditional (broken) formula:
Sales – Expenses = Profit
Here’s the Profit First version:
Sales – Profit = Expenses
By allocating your money into separate bank accounts for Profit, Owner’s Pay, Taxes, and Operating Expenses, you force clarity and intentionality into every dollar that flows through your business.
How Much Should I Pay Myself as a Business Owner (Really)?
Great question — and finally, one with an honest answer.
Start with Real Revenue
Real Revenue = Total Income minus Pass-Through Expenses (like materials, subcontractors, or printing). This provides a more accurate view of what your business is retaining.
Apply Your Target Allocations
From there, the Profit First model helps you allocate your money into categories — including Owner’s Pay — based on your business size and goals. A general starting point? 30% of Real Revenue for Owner’s Pay (but it varies).
How Much Should You Pay Yourself?
Here’s a simplified guideline using real revenue (your total income minus pass-through expenses like contractors or materials):
Not hitting these numbers yet? That’s OK. The goal is to start, track, and adjust forward. Even 10% is better than zero.
Don’t Guess — Use a System
You don’t have to overthink it, and you definitely don’t have to keep winging it. Once you know your numbers and start allocating intentionally, you can finally pay yourself consistently — with confidence.
Common Mistakes When Paying Yourself as a Business Owner
- Waiting “until it feels safe” to take a paycheck
- Confusing distributions with compensation
- Paying yourself randomly without a set rhythm
- Not separating personal and business money
You wouldn’t tell your team, “I’ll pay you when there’s money left.” Don’t do that to yourself either.
Tools to Help You Get Consistent
A bank account structure that aligns with Profit First
Bi-weekly or monthly Owner’s Pay transfers (not just “draws”)
A solid bookkeeper who understands this method (👋 hi)
You don’t have to figure out how much to pay yourself as a business owner on your own. The Profit First method helps you build that habit — and I’m here to walk you through it.
Want Help Applying This?
I’m Venus Michael — a Profit First Certified Bookkeeper located in Central Texas and proudly serving creative entrepreneurs, consultants, and service providers across the U.S. We help you pay yourself, build Profit, and ditch financial stress without drowning in spreadsheets
www.one21accountability.com/booking
One21 Account-Ability is a Profit First bookkeeping service located in Central Texas and proudly serving clients nationwide.
