The EntreLeadership Podcast
Why Making a Profit Isn’t Enough to Survive in Business
Dec 18, 2023
Learn about a struggling business owner making millions, effective team bonus structures, dishonest gym owners, and how to determine your own salary as a business owner. The podcast also covers real estate business risks, navigating financial challenges, generating revenue, and negotiating business valuations.
48:59
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Quick takeaways
- When determining how to pay yourself as a business owner, you can choose between owner payouts or W-2 wages, each with different tax implications and considerations.
- As your business grows and cash flow becomes more stable, it may be more beneficial to establish a regular salary through W-2 wages and take a bonus at year-end to ensure sufficient funds and reduce reliance on owner draws.
Deep dives
Choosing the Right Salary Structure
When it comes to paying yourself as a business owner, whether through owner payouts or W-2 wages, the tax implications are the same. Paying yourself through owner payouts means paying self-employment tax on your business income, while paying yourself through W-2 wages results in you and the business each paying payroll taxes. The choice between the two depends on personal preferences and the financial structure of your business.
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