20 Nov Should you add yourself to the payroll system?
All business owners have a number of different options available when it comes to paying themselves. It can be tricky to make the right decision, as you need to find the perfect balance between your needs and the needs of your business. One option is to add yourself to the payroll system as an employee.
The three key stakeholders you need to consider
When determining how you are going to pay yourself, you need to consider the three key stakeholders who are going to be impacted by your decision, i.e., you, your business and your employees. When it comes to yourself, you need to make sure you keep on the right side of the law and that you meet your living expenses. When considering your business, you need to assess whether your plans are viable by considering the accounting needs of you and your employees. You also need to determine your growth needs and how you are going to support them. Finally, when it comes to your employees, you need to consider how they are going to respond to the amount you have chosen to pay yourself in regards to their pay as well as the requirements of the business.
The benefits of taking a salary
If you do decide to take a salary through payroll, you will receive money on a regular basis. This is a good way to ensure you can live comfortably with a regular income, while it simplifies things regarding taxation, as you will be treated just like your employees are. This can also be good for employee morale, as they will see that you are being paid in a similar way. Another advantage associated with adding yourself to the payroll system is the fact that you will be able to reap the rewards of deductions, which include interest charges on loans, legal fees, the cost of your office space, vehicle expenses and much more.
All in all, deciding how you should pay yourself is one of the most pivotal decisions for any business owner. Adding yourself to the payroll system can be one of the easiest and most convenient solutions. It is certainly something that is worth discussing with your accountant.