pay

Hi,
I have set up an LLC, I am the only member and I have no employees. I understand that I cannot pay myself a salary.

How do I pay myself?

Thanks
Rob

Answer

You write a check from your LLC bank account to your own bank account.

It's called a profit distribution, or you can call it a guaranteed payment.

I know it sounds weird that you have to go through the "two-step" of putting money into the LLC account, just to take it out and pay yourself.

However, if you think about it, that's the way it works with your employer.

You do work for your employer's customer. They pay the employer. Your employer takes out their share, pays expenses, and then sends you a check for what's leftover.

It's similar for your LLC--you do work for a customer (sell a product, etc.). The LLC gets the money. The LLC pays business expenses (office, supplies, overhead, employees) and then pays you, the owner, the leftover.