How to Pay Yourself as a Business Owner? A Guide for Solopreneurs

You are amazing at your craft, but you just cannot work for free - it's time to pay yourself.

Laura Texidor

Co-Founder & COO

It feels good to get paid what you're worth

When you’re a solopreneur, freelancer, content creator, small business owner, your business and your personal life are deeply connected, and so is your money. You hustle to bring in clients, send invoices, and manage expenses, but when it comes time to actually "pay yourself", it can feel confusing.

‍

Do you just transfer money from your business account to your personal account? Should you set up payroll? What if you accidentally pay yourself too much (or too little)?
‍

The truth is: paying yourself as a solopreneur isn’t about just grabbing what’s left in your bank account. It’s about creating a system that helps you cover taxes, reinvest in your business, and still have money left to live your life. We wrote this guide and built Investrio, the money app built by solopreneurs for solopreneurs.
‍

Let's Talk About it: Paying Yourself Matters
‍

Too many solopreneurs put themselves last, because it's more important to cover business expenses, subscriptions, and taxes before thinking about their own paycheck. But you are your business and your business is you. Paying yourself consistently isn’t just about meeting your personal needs; it’s about proving your business is sustainable. If you can’t pay yourself, you don’t really have a business, you have an expensive hobby.

‍

Step 1: Separate Business and Personal Finances
‍

This is non-negotiable. Open a business checking account (even if you’re a sole proprietor) and keep all client payments flowing there. Use your personal account for your rent, groceries, and Netflix subscription. Keeping things separate avoids messy records, makes tax filing easier, and ensures you can clearly see how much money the business is actually making.

Tip: Connect business and personal accounts on the Investrio app, helping you see the whole picture of your finances.
‍

Step 2: Choose How You’ll Pay Yourself
‍

The method you use to pay yourself depends on your business structure:
‍

Sole Proprietorship or Single-Member LLC: You’ll typically take an owner’s draw: this means you simply transfer money from your business account to your personal account. Taxes aren’t withheld when you do this, so you’ll need to plan for quarterly tax payments.
S-Corp (or LLC taxed as S-Corp): You’re required to pay yourself a reasonable salary through payroll. That means setting up a system to withhold income tax, Social Security, and Medicare, just like a traditional employer would. Many solopreneurs use payroll software for this.
C-Corp: You’ll pay yourself a salary as an employee, and possibly dividends if the company has profits. This setup is less common for solopreneurs.
‍

Step 3: Decide on a System for Consistency
‍

No matter which method you choose, consistency is key. Treat your own paycheck like a bill you have to pay. For example:
‍

Pay yourself on the 1st and 15th of every month, just like a regular job.
Use a percentage method: transfer 30–50% of net income to yourself and keep the rest for taxes and business expenses.
Automate transfers from your business account to your personal account so you’re not tempted to “forget” or overpay.
‍

Step 4: Don’t Forget Taxes
‍

One of the biggest mistakes solopreneurs make is treating their pay like it’s “free money.” Remember: taxes aren’t automatically withheld. Whether you’re taking an owner’s draw or running payroll, you need to set aside money for federal, state, and sometimes local taxes.
‍

A good rule of thumb is to reserve 25–30% of your income for taxes. Some solopreneurs even open a separate “tax savings account” and move money there every time they pay themselves. Out of sight, out of mind and no panic when tax season arrives.

Step 5: Reinvest in Your Business
‍

Paying yourself doesn’t mean ignoring growth. Make sure you leave enough in your business account to cover operating expenses and reinvest in tools, marketing, or outsourcing help that will help you scale. Think of it as building both your personal wealth and your business wealth at the same time.

It's Time to Pay Yourself as a Solopreneur

How much should I pay myself as a solopreneur?
‍
There’s no universal number, eveyr business is different and it depends on your income and expenses. A good starting point is paying yourself 30–50% of net profit and adjusting as your business grows.
‍

Should I use payroll software as a solopreneur?
‍
If you’re taxed as an S-Corp, yes you’ll need payroll to comply with IRS rules. If you’re a sole proprietor/LLC, payroll software isn’t required, but some solopreneurs use it anyway for consistency.
‍

Can I just transfer money whenever I need it?
‍
Technically yes, but that creates chaos. Paying yourself once in a while makes it harder to budget for personal expenses and track your business’s financial health. As with everything, consistency = clarity.

Tools That Can Help
‍

Gusto or ADP → great payroll solutions if you’re an S-Corp.
Investrio → built specifically for solopreneurs, Investrio makes it simple to see your profit, track expenses, set aside money for taxes to yourself without mixing up business and personal.

It's In The Mindset
‍

Paying yourself as a solopreneur is both a mindset and a system. You deserve a paycheck for the work you do, and your business deserves a financial structure that makes sense. By separating accounts, choosing the right payment method, and planning for taxes, you’ll have the clarity to grow your business and your personal wealth.
‍

Ready to level up your business ? Sign up for Investrio today.
‍