Why You Need to Pay Yourself a Wage as a Business Owner

For small business owners, wages and having an understanding of how to pay themselves are critical to maintaining both personal financial stability and the long-term health of the business. Determining an appropriate wage involves balancing profitability, cash flow, and tax efficiency while ensuring the owner is fairly compensated for their time and effort. Many small business owners struggle with whether to take a salary, drawings, or dividends, each of which has different implications for tax and business sustainability. A well-structured owner’s wage strategy can also improve superannuation contributions and support future wealth planning.

As a new business owner, you’re already accustomed to a regular wage.

Before you started your business, you most likely worked for someone else. As a consequence, you didn’t dip into the company’s bank account whenever you needed cash. You had to budget your life around payday. That same discipline still matters as a small business owner wage. A set salary gives you consistency and even better helps you manage personal finances outside your business.

The Business Bank Balance needs to be nurtured.

The company bank account figure might look healthy. Most of it is already spoken for—think staff wages, BAS payments, rent, suppliers, stock, and tax bills. Pay yourself a structured wage and leave the business cash where it belongs: keeping the doors open and the lights on.

Let’s face it—if things go south, and you’ve never paid yourself… You lose everything. Pay yourself steadily, even modestly, and treat it like the non-negotiable it is. Predictability Fuels Growth! So now more than ever, it’s best to start paying a wage as a business owner.

A growing business needs cash to scale. Hiring new personnel, upgrading systems, or expanding to a new location requires planning and investment. Paying yourself a set amount each month creates financial predictability. Raiding the till when times are good? That’s a fast track to chaos.

Bonuses are great when they’re earned, budgeted, and taxed properly. Plan your rewards to avoid financial surprises.

Don’t also go the other way and not pay yourself and leave too much money in the Bank.

Keep the ATO (and WorkCover) Happy by paying as a business owner.

Irregular, undocumented drawings raise red flags. The ATO prefers clean, consistent payroll records. Paying a wage through the proper payroll system reduces audit risk and keeps your reporting obligations clear. Plus, your wage forms part of your WorkCover remuneration and builds a legitimate financial record you can rely on. No renumeration or wage as a business owner can mean that any workover claim results in no loss of wage.

Even if you’re self-employed, super still matters. In fact, it’s one of the best tax-deductible ways to build wealth and fund your retirement. Add super contributions to your pay plan—and your future self will thank you.

Want Finance or a Home Loan? Pay Slips Matter by showing you are paying yourself as a business owner

Banks want to see income stability. A regular wage helps you qualify for loans, credit, and business finance. Irregular drawings don’t cut it—payslips do the talking. Paying yourself puts you in a better position when it’s time to borrow.

Want to reward yourself? Awesome—make it part of a bonus structure tied to performance. This keeps your business books clean and your cash flow predictable. And don’t forget: structure your remuneration tax-effectively with a clever mix of wage, super, and dividends.

So… How Much Should You Pay Yourself?

It depends on your situation, profit and cashflow. But here’s what to consider:

– What your business can genuinely afford
– What someone in your role would earn in the market
– Your personal goals—mortgage, lifestyle, savings
– A tax-effective mix of salary, super, and dividends

We get it—sometimes it feels like there’s not enough to go around. But the answer isn’t to skip your pay. It’s to restructure costs or increase revenue. You deserve to get paid regularly.
Pay Yourself Like a Pro – Paying yourself a wage isn’t just a technicality—it’s a mindset shift. It puts you in control, makes your business more stable, and helps you grow personally and professionally.

📞 Need help setting your pay structure? Let’s tailor a remuneration strategy that works for you and your business.