How to Pay Yourself as a New Business Owner (Without Wrecking Your Finances)
One of the biggest questions new business owners ask is: How do I pay myself?
Do you take money whenever you need it?
Do you wait until the end of the month?
How much should you set aside for taxes and business expenses?
Here are 6 Tips on how to pay yourself the right way! Ensuring your business stays financially healthy while giving you the income you need.
📢 Disclaimer: This post is for informational purposes only and is not tax or legal advice. Every business is different, so be sure to consult your tax advisor to determine how much to set aside for taxes and how much to pay yourself. If you need help, we offer financial consultations to guide you through it.
Tip #1: Keep Business and Personal Finances Separate
The first rule of paying yourself? Don’t mix business and personal money.
✅ Open a business-only bank account to keep your finances clean.
✅ Avoid using your personal account for business expenses.
✅ This will make bookkeeping, tax prep, and financial planning way easier.
💡 Pro Tip: Use Relay Bank to set up multiple business accounts for income, expenses, taxes, and profit.
Tip #2: Set a Payday and Stick to It
It’s tempting to transfer money every time a client pays you. Don’t.
✅ Pick a payday—weekly, biweekly, or monthly.
✅ Pay yourself like an employee to avoid cash flow issues.
✅ Reevaluate monthly as your revenue grows.
💡 A predictable payday helps you budget smarter and keep your business running smoothly.
Tip #3: Follow the Profit First Method
Instead of spending first and hoping there’s money left for yourself, set aside percentages for everything—first.
Here’s a simple breakdown for new business owners:
💰 Owner’s Pay – 50%
📈 Operating Expenses – 30%
🛑 Taxes – 15% (varies—consult your tax advisor!)
📊 Profit – 5%
How to make this easy? Set up automatic transfers in Relay Bank so your money moves where it needs to go—without thinking about it.
💡 Want a quick visual guide? Check out this Profit First Summary for a simple breakdown.
Tip #4: Start Weekly—Then Transition to Monthly Pay
If cash flow is tight, start with a weekly paycheck to cover personal expenses. But as your business stabilizes, switch to a monthly salary to:
✅ Force better budgeting.
✅ Build reserves in your business.
✅ Avoid impulse spending when money comes in.
💡 Treat your business like a business—not a personal ATM.
Tip #5: Budget for Taxes and Use a High-Yield Savings Account
One of the biggest financial mistakes new business owners make? Forgetting to save for taxes.
✅ Set aside money for taxes in a dedicated account.
✅ Use a high-yield savings account to earn interest on tax money.
✅ Make estimated quarterly tax payments (consult your tax advisor for exact amounts).
💡 Need help figuring out your tax obligations? We can help you create a plan!
Tip #6: Live on a Budget—In Business and Life
If you want financial peace, budgeting is non-negotiable.
✅ Know your numbers so you can confidently pay yourself.
✅ Plan for slow months so you’re not scrambling for cash.
✅ Keep your business lean—spend intentionally, not impulsively.
The goal? A business that pays you consistently while staying financially strong.
Need Help Setting Up Your Business Finances?
Struggling to figure out how much to pay yourself or how to structure your accounts?
We help business owners build smart, sustainable financial systems so they can grow with confidence.
Book a consultation here. Let’s get your finances on track!
Stop Guessing. Start Growing.
Go from feeling overwhelmed by financial chaos to leading your business with confidence.
