Quote:
Originally Posted by 8sPOT
I've been searching for some answers regarding how much to pay yourself and haven't come up with much.
I've recently incorporated and the accountant asked me to figure out what I need to live on, well that's easy but I want to be able to pay down some debt.
What have some of you done that are self employed? Take a certain percentage? Take as little as possible?
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Be careful how you calculate it, because it can screw you in a lot of aspects of your life if you set it too low. I know screwing the government out of any penny you can is important to a lot of people, but.... I see a ton of clients that make an excellent living, yet have zero borrowing power, because they are now living in a $500,000 home, with a 24k/yr salary. So when they want to buy a new vehicle, or get a loan or line of credit, their debt servicing is through the ceiling. And unless you have typically 2-4 years of financial statements from the company, most banks will not use it as valid income.