Your own income
Be sure not to forget your own income. How does that work?
Sole proprietor
All the money you make is yours. That means that this is your salary. But, a word of caution: alongside your suppliers, you must also pay annual taxes and quarterly social security contributions and VAT payments. You also have fixed costs (car costs, phone bills, rental costs, pension savings, insurance, etc.) and variable costs (restaurant, unpredictable car costs, investments, etc.) that regularly have to be covered.
What’s the best thing to do? Work out what your fixed and variable costs are on a monthly basis. On this basis you can calculate what % of your income to set aside for costs. That way you can also determine how much to pay yourself. Play safe and put a little extra aside each month. For the first few months or years it will be difficult, but later you will be able to benefit fully from your labours.
Tip: profit in a sole proprietorship is taxed under the personal tax system. You can make full use of this profit and use it for personal purposes. Make sure that you do this with ‘due diligence’. By ensuring that there is enough remaining every month for the fixed and variable costs you will incur. Save money – that’s the message.
Company
All income goes initially to the company. As a business owner you obviously want to be compensated. You should pay yourself a monthly salary. It’s an idea to discuss this with your accountant. That way you can be sure of awarding yourself the right salary with the minimum of tax disadvantages.
Tip: the profit from a company is taxed under the corporate tax system. You are therefore not free to access the company profits. Your company pays you a monthly salary, and you are liable to taxes and social security contributions on this salary.
