Do you pay your self? - Contractor Talk - Professional Construction and Remodeling Forum

jmanzo1 · 10-06-2008, 08:57 AM

Just curious, as the owner of a residential custom building company do you pay your self a weekly check or do you only make your money at project completion?

MALCO.New.York · 10-06-2008, 09:32 AM

If you are running ANY sort of Business, you must pay yourself a MODEST, almost understated paycheck EVERY pay period. The greater income can be dispensed Quarterly or Yearly in the form of bonuses or, if you prefer, just plain skimmed from the books. (Not legal. But neither is Income Taxation!)

Either way, a standard income level must be established in order to keep accounting and taxes straight. (mostly for tax purposes)

Meetre · 10-06-2008, 09:57 AM

Depending on your organization type it may not matter. Sole prop makes all the money not spent at the end of the year is your income, and it's taxed as income. If you are s corp or c corp, you can pay yourself and take a "dividend" which isn't income, and doesn't have self-employment taxes. But to answer your question, no, I don't "pay" myself on a pay schedule, I take draws as needed and as I can afford to pay them from the business account. That will be changing soon, we are getting close to a comfortable amount of money in the bank

then I will start a regular pay period for me.

Cdat · 10-06-2008, 10:35 AM

I don't know how you can function without doing a specific time period payroll. How do you pay your needed expenses? Here is mine from end of September. I'll just not say if it is weekly, bi-weekly or whatever...

Base Salary 2765
Over time 924
Health Care -63
Gross Pay 3626
FICA SS Tax -224.81
Federal Tax -487.09
Michigan Tax -151.39
Roth Basic -111.00
Charity -10.00
total deductions -1036.87
Net Pay 2589.13

George Z · 10-06-2008, 06:00 PM

Salary + wages when I have to be in the field.
I should get commission for sales too.

Chris Johnson · 10-06-2008, 06:27 PM

If you don't pay yourself, why do you do this everyday?

My crew gets paid on the 1st and 16th of every month, I pay myself on the 1st only, but I pay myself more then the crew

BuildingHomes · 10-06-2008, 07:56 PM

I write myself a cheque whenever I remember to for a fixed monthly amount. Then at the end of the business year I get screwed on taxes. Good times.

This year I'm doing it differently and having the book keeper figure out all the proper deductions and remittances.

I ust need enough to pay the mortgage and utilities. It will go up as sales go up.

Shareholder loans are also a wonderful thing. When I was employed full time I spent a lot of my own companies money. I rolled it all into a shareholder loan and then when I went full-time on my own I just paid back the loan in increments, tax free.

rbsremodeling · 10-06-2008, 08:01 PM

Read rich dad poor dad. While I think alot of the book is bs. It gives you good food for thought. You come first and everyone else is secondary when it comes to who gets paid. Except you guys of course

Meetre · 10-06-2008, 08:16 PM

I agree that in most situations you need to make sure you are paying yourself, other wise it's not worth all the head aches! I'm just lucky enough to not need to pay myself each and every month, and seeing as I just started this business in the last year, it's easier FOR ME to not worry about having to pay myself right now. I just leave it all in the business so I can have it avalible if and when the company needs it. In the next year that will change, but for getting started (again) it's working great for me

MALCO.New.York · 10-06-2008, 08:42 PM

Quote:

Originally Posted by Chris Johnson

If you don't pay yourself, why do you do this everyday?

My crew gets paid on the 1st and 16th of every month, I pay myself on the 1st only, but I pay myself more then the crew

The question was not about making money for yourself, it was about the manner in which you distribute it to yourself. In the form of a standard paycheck or in the form of just keeping the profits AFTER all has been collected.

A paycheck is a MUST for tax purposes.

**AtlanticWBConst** · 10-06-2008, 08:48 PM

Minimum payment - Paid weekly directly out of Co acct. thru a pay company, with alot of taxes automatically taken, and paid from that (file zero and withold extra). End of the year = All taxes paid up.

Then a weekly draw, on top of that.

Large projects = bonus paid at end of project.

silvertree · 10-06-2008, 09:19 PM

Paycheck every 2 weeks, always the same and taxes are withdrawn.

jmanzo1 · 10-07-2008, 08:18 AM

Thanks everyone this was great information

nlgutters · 10-07-2008, 03:41 PM

Quote:

Originally Posted by AtlanticWBConst

Minimum payment - Paid weekly directly out of Co acct. thru a pay company, with alot of taxes automatically taken, and paid from that (file zero and withold extra). End of the year = All taxes paid up.

Then a weekly draw, on top of that.

Large projects = bonus paid at end of project.

Are you a sole propriter, llc or inc?\

The reason i ask is i wanted to do the same thing. But the info i got was then i would have to insure myself with workers comp. Based of income that wouldnt be a pretty bill.

hbelectric · 10-07-2008, 07:01 PM

I used to get a paycheck once a month, it's been awhile since i have seen one. We are a corporation, for taxes i need to pay myself. But times are tough, so it' sjust not happening. Being Inc. sure has been great though.

rbsremodeling · 10-07-2008, 07:16 PM

I became a contractor to help those in need. Taking a check would seem wrong. I am just happy that I can fix things and put a roof over some ones head

silvertree · 10-07-2008, 08:27 PM

Quote:

Originally Posted by rbsremodeling

I became a contractor to help those in need. Taking a check would seem wrong. I am just happy that I can fix things and put a roof over some ones head

Who says we don't have saints in the building trades.
You Sir, because of your selfless devotion are an inspiration to everyone showing butt crack to the masses

rbsremodeling · 10-07-2008, 08:29 PM

Quote:

Originally Posted by silvertree

Who says we don't have saints in the building trades.
You Sir, because of your selfless devotion are an inspiration to everyone showing butt crack to the masses

buildenterprise · 10-07-2008, 09:24 PM

Sole props are great! Every penny left after bills is MINE, ALL MINE! Well, almost half would be Uncle Sam's if I didn't hide it.

Seriously though, pay yourself first. If nothing else it will make you find a way to increase your income so you can pay those bills too!

Snow Man · 10-07-2008, 10:06 PM

I'll never tell. But there are them checks written out to cash.