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Paying Yourself
hello, I've used this site occasionally and found it useful for referencing various aspects and issues of being a freelancer.
I was wondering how people here pay themselves? I've been a freelance designer and illustrator for approx 3 years now and have always maintained my finances through my personal account. Bad practice i know, but i have recently opened a specific business bank account and i'm in the process of updating my new banking details to my invoice templates / clients etc.
But I was wondering, how much should I take from my business account as a weekly/monthly wage? I know this obviously depends on how much i earn, but i was wondering if there was a standard procedure or amount? Also, is this figure eligible to be included as a business expense and therefore be included on my tax return?
Thanks!
I was wondering how people here pay themselves? I've been a freelance designer and illustrator for approx 3 years now and have always maintained my finances through my personal account. Bad practice i know, but i have recently opened a specific business bank account and i'm in the process of updating my new banking details to my invoice templates / clients etc.
But I was wondering, how much should I take from my business account as a weekly/monthly wage? I know this obviously depends on how much i earn, but i was wondering if there was a standard procedure or amount? Also, is this figure eligible to be included as a business expense and therefore be included on my tax return?
Thanks!
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Alisonp
Messages count : 27Likes count : 0Registration : 17 November 2009'Fraid not. Whatever you pay yourself is known as "personal drawings" and is not tax-deductible, so HMRC told me. OTOH, if you employed someone else and paid them, that *would* be, I think.
As for how much: how much do you need, and how much can you afford?! Make sure you've got enough for the monthly bills and something left over. If your new business account is an interest-bearing one, it's probably advisable not to take money out until you need it, bearing in mind that it may take a few days to transfer over. If you have a goodly surplus, you could look at putting that into some sort of savings account where you can get at it easily as and when. I'm assuming that you're a sole trader, BTW - if you're actually a limited company you'll probably be more restricted in what accounts you can use, I think.Freelance technical translator, French and German into English - Contact in PM
Lupita
Messages count : 207Likes count : 6Registration : 2 November 2006 - Contact in PM
felt_tip
Messages count : 6Likes count : 0Registration : 16 January 2009great, thanks guys
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AdamC
Messages count : 8Likes count : 0Registration : 16 December 2010paying yourself from your earnings is important as it keeps your drive for work up and it is also good for your company finances. most financiers advice that you pay yourself atlleast 60% of your net income