How to pay yourself from your LLC — without guessing

One of the most common questions we get isn't about the business at all — it's "how much am I actually supposed to pay myself?" For LLC owners, there's no paycheck automatically dictating the answer the way there is at a W-2 job, so it ends up decided by feel: whatever's left in the account at the end of the month, whenever it feels safe to move it.

That approach has two failure modes. Either you underpay yourself for months because the account looks thin, even though the business is actually profitable and the cash is just tied up in timing — or you overpay yourself in a good month and then can't cover payroll, rent, or taxes two months later because you spent money the business hadn't actually kept.

A better framework starts with your P&L, not your bank balance. Once your books are current, you can see actual monthly profit — revenue minus every real expense, including the ones that don't hit every month (insurance, annual software renewals, equipment). From there, set a consistent owner's draw as a percentage of trailing profit (a rolling 3-month average smooths out one unusually good or bad month), rather than a fixed dollar figure decided once and never revisited.

Keep a buffer in the business account before you draw — a month or two of operating expenses — so a single slow month doesn't force you to choose between paying yourself and paying your team or your bills. And separate the draw account from the operating account entirely, so it's never ambiguous which dollars are "yours" and which are the business's working capital.

This is also where entity structure matters: LLCs taxed as sole proprietorships, partnerships, and S-Corps each treat owner pay differently for tax purposes, and the right structure can meaningfully change what you owe. That's a conversation worth having directly with your bookkeeper or CPA once your books are clean enough to see the real numbers — which is exactly what the Growth and Advisory tiers are built to support with monthly and quarterly check-ins.

A free, 20-minute Books Health Check gives you a plain-English read — no obligation.