Paying yourself in small business is one of the most important and most overlooked, things you will ever do as a business owner. If you’re not doing it properly, your business is working against you, not for you.
I want to talk about something that doesn’t get nearly enough airtime in the small business world.
Not marketing. Not social media. Not your next launch.
Your wage.
Specifically, are you actually paying yourself one?
Because here’s what I see again and again working with small business owners across Australia. Brilliant, hard-working people who are pouring everything into their business. Long hours. Real effort. Real sacrifice.
And at the end of the month? They’re barely taking anything home.
When I started my business back in 2003, I had no idea how to structure paying myself.
And before you judge me. I had actually run other people’s businesses for years. I understood operations. I understood staff. I understood budgets.
But I was always on the other side of the equation. Someone paid me a wage. I just showed up and did my job.
The moment I became the business owner, everything changed. Suddenly I was responsible for making sure the business could actually pay me. And I genuinely did not understand what that meant.
By my second year, reality hit.
I sat down and worked out what I’d actually taken home versus the hours I’d put in. I was earning less than I did when I was eighteen years old. And I was thirty, with twenty years of experience and a business I’d built from the ground up.
That moment changed everything for me.
I made a decision. My business was going to pay me properly. Not one day. Not when things got easier. Now.
Fast-forward to today. I’m fifty-three. I’ve consistently paid myself a wage equivalent to what a FIFO worker earns. I’ve paid myself superannuation every single quarter for over twenty years. And on top of my weekly wage, my business pays me a separate profit distribution every year, completely distinct from my wage. That’s not luck. That’s what happens when you build the right structure from the ground up.
I’ve also employed staff, including Kellie, who has been with me for two decades, paying them proper wages and super too.
I’m genuinely proud of that. Because when retirement starts appearing on my horizon, I’m not panicking. I have something to show for all those years of work.
I want the same for you.
I have a colleague in the wedding and events industry. She started around the same time as me.
She never set up a proper wage structure. She never paid herself super. She just took money when she needed it and reinvested the rest back into the business.
Now she’s at retirement age too. And she has a business that can’t be sold because it runs entirely on her. It’s also a very physical business, and her body is feeling the years. She has no super. No financial cushion.
That’s a scary place to be.
And it didn’t have to be that way.
This is the most important thing I want you to take away from this blog.
Your wage and your profit are two completely different things.
A lot of small business owners treat their business account like a personal piggy bank. They pull money out when they need it, and whatever’s left they call “profit.”
That’s not how paying yourself in small business actually works. And it’s why so many business owners feel like they’re always behind.
Here’s a simple way to think about it:
Your wage is what the business pays you to do your job. It’s an operating expense. Just like rent. Just like software. Just like staff wages.
Profit is what’s left over after all expenses, including your wage, have been paid.
If you’re not accounting for your own wage as a cost of running the business, your numbers are lying to you.
Here’s a practical way to figure out a starting point.
Ask yourself this question: What would I have to pay someone else to do what I do?
Think about it properly. If you were to hire a person to replace yourself in your business, what would they earn? What’s the market rate for that role?
Now add on the actual cost of employing that person:
When you add all of that up, that’s the true cost of your labour to your business. That is the bare minimum your business should be paying for the work you do.
It’s not a luxury. It’s the cost of having you in the business.
I know this can feel overwhelming, especially if your business has never operated this way. So let’s keep it simple.
Step 1: Work out what you need personally
What does it actually cost you to live? Rent or mortgage, bills, groceries, car, personal expenses. Add it up. That’s your personal financial baseline, what you need to function each week or month.
Step 2: Work out the true cost of your role
Using the framework above, market rate for your role, plus super, plus PAYG obligations. This is your wage benchmark.
Step 3: Set a wage, even if you can’t fully pay it yet
Your business may not be able to pay your full wage right now. That’s okay. What matters is that you know what the number is, you’re working towards it, and you’re paying yourself something consistent rather than nothing at all.
Step 4: Separate your accounts
Have a business account and a personal account. Your wage gets transferred on the same day, every week or fortnight. Treat yourself like an employee. Because in your business, you are one.
Step 5: Track it every month
Make paying yourself part of your monthly financial review. Is the business meeting your wage? Falling short? Getting stronger? You need to know.
Once your wage is built into your expenses, what’s left is your profit.
A simple starting formula:
Revenue – Expenses (including your wage) = Profit
Your profit is what grows your business. It’s your buffer. Your reinvestment fund. Your reward for taking the risk of business ownership.
Without a proper wage built in, you’ll never really know if your business is profitable. You’ll just know if it’s busy.
Busy and profitable are not the same thing.
I want to be really direct with you here and I say this with so much care.
I have been exactly where you might be right now. Unsure of the numbers. Uncomfortable talking about money. Telling myself I’d sort it out later, when things settled down, when the business grew a bit more.
Later has a way of becoming never.
I’ve sat across from so many business owners, some just starting out, some who have been in business for ten, fifteen, twenty years, who are finally having this conversation about paying themselves in small business for the very first time. And every single one of them has said the same thing: I wish I’d done this sooner.
There is no judgement here. None. Whether you’re in your first year or your fifteenth, it is never too late to get this right. But it does require you to stop ignoring it.
The business owner I mentioned earlier, my colleague in the events industry, she ignored it. And now, at the point where she should be thinking about stepping back and enjoying the fruits of her work, she has nothing to sell and no financial safety net beneath her.
I don’t want that to be your story.
If you’ve been avoiding this conversation, with yourself, with your numbers, with a mentor, I want you to know that an Hour of Power session with me is a safe, honest, no-judgement space to start. We’ll look at your numbers together. We’ll work out what your wage should be. We’ll build a plan that actually works for your business and your life.
I’ve been through it. I’ve helped others through it. And I can help you too.
The best time to sort this out was when you started. The second best time is right now.
Book your Hour of Power session today and let’s get you paying yourself what you deserve.
