Should I pay myself a low salary or just take dividends as a director?
- Thread starter YetiDrFun
- Start date
ronlevuruxsuper
New Member
I always believed the goal was to keep less for yourself than the percentage your company contributes in taxes.
EpicGecko47
New Member
$190K, effective tax rate is 30%.
FairyBurningStar
New Member
You don't technically have to pay yourself wages, but if your total wages go over a certain amount, you'll have to pay payroll tax. A good approach is to pay yourself what's typical for your role, and then take any extra as dividends afterward.
NeerCanMellowPew
New Member
After a lifetime of learning things the hard way
Here’s my number one tip: there’s a difference between tax accountants and management accountants. Find one who’s a gun at both find an accountant who’ll question you, who’ll hold you accountable.
Pay yourself a wage, mate enough to cover your needs without having to randomly top up or take drawings.
Take your drawings at the end of the month or quarter only from profit, only when everything is paid.
You could end up in a whole world of Div7a pain if you don’t know what that is, find out.
Complacency over time can bite hard.
Your business is not your super let that sink in!
Everyone says don’t worry about paying yourself super. Sure, it’s okay for a few years but set a time limit, or contribute some profit distribution to super.
The last thing you want is to be mid 50s, highly leveraged, and then the business blows up. Don’t assume your business won’t blow up do the opposite. Shit can go bad real quick, and when you least expect it, you're getting Rodgered harder than a police radio.
iCare can audit you and they’ll say your drawings are considered wages. Imagine how good it is to get a bill for eight years of back dated workers’ comp premiums for yourself, even though you never even had a sick day. It happens trust me.
Just save yourself al l the bullshit and pay yourself a wage.
Here’s my number one tip: there’s a difference between tax accountants and management accountants. Find one who’s a gun at both find an accountant who’ll question you, who’ll hold you accountable.
Pay yourself a wage, mate enough to cover your needs without having to randomly top up or take drawings.
Take your drawings at the end of the month or quarter only from profit, only when everything is paid.
You could end up in a whole world of Div7a pain if you don’t know what that is, find out.
Complacency over time can bite hard.
Your business is not your super let that sink in!
Everyone says don’t worry about paying yourself super. Sure, it’s okay for a few years but set a time limit, or contribute some profit distribution to super.
The last thing you want is to be mid 50s, highly leveraged, and then the business blows up. Don’t assume your business won’t blow up do the opposite. Shit can go bad real quick, and when you least expect it, you're getting Rodgered harder than a police radio.
iCare can audit you and they’ll say your drawings are considered wages. Imagine how good it is to get a bill for eight years of back dated workers’ comp premiums for yourself, even though you never even had a sick day. It happens trust me.
Just save yourself al l the bullshit and pay yourself a wage.