Something that I KNOW many of us are constantly worried about is the financial health of our business and our family. With inflation on the rise (grocery bills, childcare and gas are 🤯), it can feel a little overwhelming to know how to budget for life’s expenses. And that includes taxes!

A question I get often is... how much of my business income do I set aside for taxes?

aka... how much can I pay myself as an entrepreneur?

How much you can pay yourself depends on a few things - let me break it down for you!

What state you live in: State income taxes can vary from zero (!!) to 13.3%. if you live in a state with high income tax (hi, it's me!), set aside more than what the IRS estimates for you. (Programs like QuickBooks can help with this.)
W2 vs. 1099 employment: If you file your taxes jointly with your partner and they are a W2 employee, you may be able to set aside less for your personal tax return, as they are likely getting a significant amount taken out of their paycheck.
Passthrough Tax: This is a new elective option that my accountant shared with me. It varies state by state, but is a huge help for income tax. Ask your accountant about it!

With all of that said, I know you want an actual percentage or number. While I can't give you exactly that - I CAN tell you what I pay myself and you can take that as you wish!

Currently, I pay myself 30% of my business revenue. I leave the remaining 70% in my business account for biz expenses and quarterly taxes.

**HUGE NOTE: some business owners can pay themselves up to 70% of their business’ revenue!

This all varies depending on how much money your business is making & what expenses you have. When I first started out, I was making about $1-2k per month and could pay myself most of it. I also didn’t have an assistant at the time! Now, I have more expenses in my business (my own VA, a contractor who assists with my PR + designers for big projects) AND I make more overall, so I don’t need to pay myself as great of a percentage. I am very comfortable taking my 30ish% and leaving the rest in my business each month!

At the end of each year, I can give myself a "bonus" if I have set aside too much or I can reinvest it into my business (helloooo masterminds and high-level courses to keep growing!).

This numbers stuff can definitely be scary - but I encourage you to not let it stop you from growing your business. And keep in mind, it's always best to pay yourself less and save more to cover expenses/taxes... and then enjoy a bonus later vs. owing taxes you weren't expecting!

PS: If you’re looking to dive deeper, I feature a tax guest expert in my VA Bootcamp. You can click here to learn more!

How I Pay Myself as a Growing Entrepreneur

catch ya on the gram!