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Starting your own business has always been your dream. Everyone who knew of your plans told you what a good move it was going to be – for yourself and your career. The road to success was not easy, but it taught you well. It gave you a sense of independence. Being your boss comes with its own set of responsibilities, and as they said, you have to do what you have to do to make things work. But how about your salary? How much should you get paid?
You have put in good money into this investment, and now the business is running smoothly, and there’s steady cash flow. That’s good news! Perhaps the only question left unanswered is whether or not you should get paid. If you are to be paid, how much should your salary be worth? Accountants in Edmonton have got a few tips you need to remember before getting your salary as the boss. This is to make sure you don’t overpay yourself and lose your business investments in the long run.
Tip 1: Only Take Part of the Profit
The payment that you get as the owner of the business depends on a lot of factors, including the nature of the business itself. If you are the sole proprietor of the business, you not considered as an employee of it. Thus you shouldn’t get a salary. Instead, you can draw from the company profits instead. The term distribution, on the other hand, should be used when the business has more than one owner. How much you draw should not be more than the company could afford at the moment. To determine this, you need to consult an accountant in Edmonton.
Tip 2: Get Salary Just Like any Other Employee
You are the boss. You are the owner of the business, but this doesn’t mean you can get as much money from it as you can. In fact, before you do get a salary, it is crucial that you establish a payroll account with Canada Revenue Agency. The salary you will get will be taxed like the other salaries your employees are getting. To develop a good payroll system, make sure you work closely with an accountant you can trust.
Tip 3: Consider the Taxability of the Salary you Ought to Receive
The nature of your business will help determine the amount of tax you ought to pay the government. When you are running your own business, worrying about the tax might not be one of your primary concerns. For this, you should have accountants Edmonton to do it. The amount you pay is based on the profit your company earns. Let the experts take care of it for you to avoid penalties and surcharges in the long run.
Managing your own business comes with duties and responsibilities, and it’s only right that you get paid for doing what you do. However, the amount you get should also abide by the rules you and the government have put in place. In all this, an accounting firm you can trust can help ensure that you are paid and that your business remains financially secure.