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Pay yourself calculator

How much you can pay yourself each month once the business has kept a real cash buffer, and what that pay does to how long it could survive without revenue. Nothing stored.

The business
Your plan
How you pay yourself
Sole proprietors and single-member LLCs: transfers, taxed on profit.
Pay yourself
€8,250
per month, as a fixed draw
Reserve set-aside
€750
per month, filling the buffer over six months
Survival buffer
1.0
months, if revenue stopped today

Take €8,250 as a fixed monthly draw and leave €750 in the business until the reserve reaches €19,500. Set aside roughly 25 to 30 percent of each draw for taxes before you spend it: in the US, self-employment tax alone is 15.3 percent, and income tax comes on top. At this pay the business could run 1.0 months with no revenue at all, against 2.3 if you paid yourself nothing.

This is planning math, not tax or legal advice. Entity rules and rates differ by country and situation; the mechanics of each setup are in how to pay yourself as a business owner.

How the number is worked out

Reserve first, pay second:

reserve target    = monthly expenses x buffer months
reserve set-aside = shortfall vs target / 6 months
pay yourself      = monthly profit − reserve set-aside
survival buffer   = cash / (expenses + your pay)

The order is the whole method. Most owner-pay advice starts from what you need and hopes the business can carry it; this starts from what the business needs and pays you from what remains. The JPMorgan Chase Institute found the median small business holds only 27 days of cash buffer, which is why the reserve goes first: a business with no buffer turns every slow month into a personal pay cut.

The last line is the honest cost of the decision. Your pay is an expense like any other, and the survival buffer is the same arithmetic as a startup's runway: cash divided by what a month costs. The mechanics of actually moving the money, draws, payroll, distributions, entity by entity, are in how to pay yourself as a business owner, and if you run a funded startup, the stage-based framework is in founder salary: how much to pay yourself.

Common questions

How much should I pay myself from my business?

Pay yourself what is left of monthly profit after the business has fed its cash reserve. Set a buffer target of at least three months of operating expenses, fill any shortfall over a few months, and take the remainder as a fixed monthly amount. That order matters: owners who pay themselves first tend to discover the reserve was the thing they skipped.

What percentage of profit should I pay myself?

There is no universal percentage, but the best-known framework is Mike Michalowicz's Profit First, which allocates roughly 50 percent of income to owner's pay for businesses under $250,000 in annual revenue, with the share falling as the company grows and hires. A reserve-first calculation usually lands in a similar range while adapting to your actual cash position.

What is the difference between an owner's draw and a salary?

A draw is a transfer from the business account to yours: no payroll, no withholding, available to sole proprietors, partners and most LLC owners. A salary runs through payroll with taxes withheld, and is how corporation owners, including S-corp owners, must pay themselves for the work they do. The legal form of your business decides which applies, not preference.

How much should I set aside for taxes on an owner's draw?

A common planning range in the US is 25 to 30 percent of each draw: self-employment tax alone is 15.3 percent, and income tax comes on top at your personal rate. Your actual figure depends on your situation and country, which is a question for an accountant, not a calculator.

Do I pay taxes on the money I leave in the business?

If you are a sole proprietor or a single-member LLC, yes: you are taxed on the business's profit whether you draw it or not, because the business's income is your income. Leaving cash in the account builds the reserve, but it does not defer the tax on the profit that produced it.

Make your pay a line in the model, not a monthly debate

Plainhub keeps your pay in the plan with every other cost, so the buffer, the burn and the month you would run out of cash all update the day anything changes.

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