Owner's draw vs payroll salary: paying yourself as an owner with Hector Garcia | QuickBooks Payroll
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- เผยแพร่เมื่อ 23 มิ.ย. 2024
- Learn more about owner's draw vs payroll salary and how to pay yourself as a small business owner: intuit.me/2Pyhgjf
In this QuickBooks Payroll tutorial, @HectorGarciaCPA answers the question, 'How do I pay myself as a small business owner?' Learn the difference between an owner’s draw and a payroll salary and why this is such an important decision to make when considering how to take money out of your business.
In this video:
0:00 How to pay yourself as an owner
1:29 Understanding Payroll Salary vs Owner's Draw
4:07 Example of owner's draw
5:12 Example of owner's salary via payroll
6:22 Best practices for owner compensation
Leave a comment below and let Hector know what other questions you have about paying yourself as a small business owner or any other payroll topics.
Hector Garcia is a CPA (Certified Public Accountant), QuickBooks consultant and business owner. He is also just a big fan of Intuit QuickBooks! He has teamed up with QuickBooks to produce this video series about payroll.
Disclaimer: This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.
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Just had my QB Live Bookkeeper clean up and now time to choose a structure change after being a DBA for >15 years. Love and appreciate your videos!
Clear and logical, I can't appreciate more on professional knowledgeable video like this, THANK YOU!
Great value from a great person. Thanks Hector for providing your wisdom and thanks to Intuit for partnering with you and making these videos possible.
Thank you for sharing your knowledge! This is a great summary as I was needing clarification on salary, owner's draw and the surrounding options and company structures. I'm realizing after many years in business that payroll and inventory management are an understated and vital part of the business's success!
OUTSTANDING VIDEO..Answered a BUNCH of questions for me!!THANK YOU!
I have to hand it to you, this information is super valuable and will come in handy as I finish out this 2022 mowing season!! Thank you!!
Thank you Hector. This is exactly what I was looking for. Thanks for all the Valuable information. 🙂
Thanks Hector for another great video You are my go to when I need to resolve issues...
Very helpful video, actually all Hector's videos are very helpful and in my opinion the best.
Hector is amazing. I’m a huge fan of his videos.
Thank for the overview. This was very helpful!
Tons of Value in this!! Thank you for making this!
I can't believe how long it took me to find this video. Thank you so much. This was so helpful.
Great video Hector! Your explanations are clear and concise. I appreciate it!
I like the video makes me feel more confident and gives me the tools to explain to my clients. Thank you, Hector and I look forward to your other videos.
Hector is a great teacher and accountant. thank you for this video!
I learned more from Hector's video than from my accountants/tax person! So happy I found this video!
This guy rocks! Explains things so clearly and at a level that "non-accountants" can understand.
Hector you are phenomenal! This Video is Totally on-point!
Outstanding presentation! I use QB to track income/expenses between an S Corp (motel) and our LLC (the motel property owner). I’m set up exactly as you describe :-))
Great presentation, direct and complete information on this topic, many thanks.
Hector this was a fantastic session. You have taken a very complex issue for new business owners and put it into understandable terms, decision to be made, and steps. Everyone should subscribe as I just did. I look forward to your other videos. Thanks!!!!
love it! thanks
Thanks! This was explained quite well, salary and draws!
Very informative, straight to the point.
Super-clear, thank you Hector. Terrific and very helpful!
Hector, you are amazing, thanks for the videos
Thank you for this easy to follow explanation. SUBSCRIBED!!!!!! Thanks you again
You're welcome! We have a ton of video demonstrations here on youtube but also have a community page that can assist you with commonly asked questions, tips with QuickBooks and more(community.intuit.com).
Thank you. Age me a lot to think of. Glad I found your video.
As a QuickBooks Pro Advisor I am asked this question a lot. Hector gave me the tools to help explain this complex topic to my clients, whether they're lawyers or Etsy shop owners. Thank you Hector!!
awesome!
Another great video! Thanks Hector :)
Very Informative and easy to understand!
Thank you hector for lending us your helpful hands. ✋🤚
Very helpful tips on self pay. Thank you.
Thank you, for the first time I understand this....
Great video for first time small business owner! Very helpful information.
Glad it was helpful! ^Emma
I found this to be easy to follow and get set up. also step by how to instructions are great.
Hands down, Hector is a great teacher and accountant. Thank you for this video!
Hands down... I see what you did there.
I k
@@St.CrimsonTweets pun intended
Greatful for Hector!!
Love this guy! He makes everything so clear!
How do you go by getting an owner draw, operating as a 501(c3)
Great clear explanation!!
EXCELLENT presentation, thank you, I'll follow this presenter!
Glad you enjoyed the video, Gail! ^Emma
thank you for the review
Excellent information. Thank you! Almost done with accounting degree 🙂
Great info!!
Thank you!
That you so much. Very helpful information and works perfectly.
Thanks for all the detailed information you have provided in this video. I like your way of explaining every point. Keep sharing such great videos in the future also.
this was very helpful thank you. im subbed.
Nice job, well done!
You are very knowledgeable and expert.
As business owner, I encourage my employees to take an "all hands on deck" approach to get the job done. Thank you Hector for your advice! 😉
"All hands" on deck 😂🤣
Exactly what I was looking for!!!! Thx
We're glad to hear that this video helped! Have a wonderful day. -Kyle
Wonderful! Just started SCorp
Good stuff !!
Excellent stuff bro
Very informative video
thank you, Hector!
I am becoming a LLC in a few years. I will be buying the company i work for and this has helped me understand thank you
Very handy information!
I wish this video would have been around when we started our first business. Very informational.
Excellent love it
You're most welcome. Please know my team and I are always here to help. ^Alex
Finally! An instructive video that goes beyond the manipulative techniques of punching a keyboarded spreadsheet of the latest version of Quickbooks to the more nuanced message of how the government views compensation.
I am glad you liked it!
Great video sir..
love this
I took a lot of notes. Thanks for all of this information. I will be forming a new business this year. It is obvious now that I will consult a tax professional before making all of the necessary choices. Subscribed.
Just following up a year later... Did you end up starting this business?
Favorite CPA
...excellent video.
explained beautifully
Hector. I have more questions. It was great to listen to someone who explained terms that they use. I am just starting my business and don't want to make the mistakes I made before.
Thank you so much
Thank you Hector. btw, where did you get that record player stand in the background? Its super cool!
Hey Hector. I took a quickbooks class with you many years ago. I was googling and your video came up as the best answer. I knew it was you before you said your name. You may not remember me but I remember you.
Wow, that was a decade ago! I remember you and your mom... its was at my Davie Training center...
@@HectorGarciaCPA YES! You do remember me. You are very consistent. I follow you on LinkedIn too. Keep it up, Rockstar! Maybe I could interview you for my TV channel on Roku? I have a show on Roku - Christians and Money. If yes, my email is support@trudybeerman.com
Hi Trudy!!! Do you remember me?
@@pausefornow Primerica
Good job, my firm does payroll for 155 clients. We like 70-75% payroll 25-30% shareholder distributions. Also pensions are controlled by salary paid to the shareholders only. Draws/Distributions are not earned income and do not help for SEP contributions. I know that you know that but you may want to add that topic to your next one.
Hector, thank your for sharing. Do you have a video on creating W2’s for owners taking owner draws?
Thank you!!
Great content
Glad you enjoyed it!
Nice video sir
Thank you!
As the owner of a S Corp I pay myself a a salary that’s got payroll taxes withheld. When I take a draw I have my accountant withhold tax so I’m not having to pay it at the end of the year
not all the way through the video but best piece of advice so far is between 3:00 and 4:00
Thank u sooo much
Hi , Well, I did buy a version of Quikbooks and never got it set up this year. Now it is Dec. 6, 2022.
I just watched your video. I had asked my CPA about an S corp 2 years ago. He said that he did not think I made enough money to even think about that. While it is true that I do net very little money now. I do have 2 new rentals that are currently not generating anything till I get some folks
to rent them. Then I have 2 new RV Pads that are almost done, missing the electric meters at over $4k , and that is exactly why. I did sell a home near my CPA and did a 1031 exchange for one of the rentals. Anyway, every video I have seen with you and atleast 3 other Tax people, all say, "
I like this guy I feel like I’m in good hands.
Made me lol
🤣
He seems like a person who would be a very good helping hand!
Great information! Do you have video's regarding payroll taxes for nonprofits, 501 (c ) 3, and paying yourself as a nonprofit Executive Director?
Thanks Hector!!!
I have always thought pay yourself as you would any employee, in the form of a check.
I've seen a few companies go under for looking at the companies money as their money. They should always be separate and recorded as such.
this guy has catchers mitts for hands
idk this guys pretty cool i like him :)
Thank you. Very informative. what is the entry to book owners draw, advance?
This guy has huge hands.
🤣🤣🤣
Hey Hector you looking nice in QBO Theme dress.
It really depends on the type of tax entity. Only the S Corpration will require a salary. Sole proprietorship and partnerships cannot pay salaries to the owners
Excellent point and very true
Thanks Hector! I have two new single employee (me) LLCs and this is my first time doing this... I am trying to decide what QB tools I need. I want to track the corporations' HSA, IRA, and 401 contributions - as well as payroll - I think. I am not clear on how to measure if these deductions from the net profit of the company are beneficial tax-wise, or if I am simply trading where I pay taxes - (my personal income taxes versus paying via the LLCs'). Is there a template that might help small businesses to figure this out? ...What QB version do you recommend and why?
Great video, thanks a lot. I'd suggest to include more examples and numbers
How about a coloring book too?
@@itsallbiznz155 and your sister in miniskirt
@@Dude408f 🤣🤣
@@itsallbiznz155 😂
Hi .. very good information , need help on considerations for my self incorporated company
Nice
Thanks
All very interesting. I've been in business since 1987 and started using Quick Books in 1998. I've never drawn a salary as my income has never been consistent. I've always paid estimated tax and relied on an accountant for tax preparation. I record all compensation as Owners Capital Draws and became an LLC years ago operating as a single person. My Accountant has usually had me upload an Accountant's copy file. I expect that he knows more about the tax implication's than I do. Last year was the 1st time he didn't make any adjustments to the company file. I hope that it's because he didn't think it was needed rather than a reluctance of paying a much higher fee for his QB copy like the business owners did!
If your accountant has lots of business clients, he will have zero reluctance in paying for his version of QB.
@@stevebabiak6997 He doesn't, it's small companies like mine that are being extorted by Intuit, and as it turns out I was negligent in getting my company file prepared properly which is my responsibility, not his! He pointed out a few things that I should have had kept up to date but didn't. And agreed that Intuit is really taking advantage of small companies like mine!
Hi Hector. Poignant video! Q: How would you treat foregone wages by owners, in terms of balance sheet? Thank you
This guy's hands are huge!!!
Thanks a lot... Now I can't stop staring...