10/09/2026
Salary vs. Owner’s Draw: How Should a Business Owner Pay Themselves?
How you pay yourself depends largely on your business structure and tax classification.
• Sole Proprietorship → Owner’s draw�
• Partnership → Owner’s draw�
• Single-Member LLC → Often an owner’s draw under its default tax treatment�
• C Corporation → Owners working as employees generally receive salary�
• S Corporation → Shareholder-employees who perform services generally need to receive reasonable compensation through payroll before taking distributions
A salary provides regular wages with payroll withholding. An owner’s draw is more flexible, but taxes generally aren’t withheld from the payment itself.
The important part is that you can’t simply choose whichever method you prefer without considering how your business is taxed.
Not sure which method applies to your business? Let’s take a look together.
☎️：928-680-1444
📩：[email protected]
🌐：https://redrocktax.com/
