So you have a steady flow of income but you’re stuck on how to pay yourself? First it’s important to understand what structure your business is operating under, and this will impact how you can pay yourself.
In this tax tip, we will look at three of the common business structures, being; sole trader, partnership and company, and how you can pay yourself under each of these.
As a sole trader you are the individual operator and from the tax office’s viewpoint, there is no distinction between you and the sole trader – your sole trader is attached to your own personal tax file number. All the money that you make from your business (less tax) is yours. Continue reading “#TaxTipTuesday: I have my own business. How can I pay myself?”
In this Tax Tip Tuesday, we look at a question that business owners ask when making profits. How do I pay myself dividends?
This is part of our three part series on how do I take money out of my company?
Pay myself dividends?
A dividend is effectively a distribution of profits from the company to its shareholders. It is paid in accordance with the company’s shareholding. What this means is that if you and a friend each own 50% of the company, then the dividend should be paid out in that proportion.
One of the great things about the tax system in Australia is that when a company pays tax on its profits and they are distributed to shareholders as dividends, the shareholders can receive a credit for this tax already paid. The payment of these profits with tax credits is called a franked dividend. Continue reading “Tax Tip Tuesday: How do I pay myself dividends?”