Owner's draw vs payroll salary: paying yourself as an owner with Hector Garcia | QuickBooks Payroll
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- čas přidán 1. 07. 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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OUTSTANDING VIDEO..Answered a BUNCH of questions for me!!THANK YOU!
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.
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!!
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!
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!
I can't believe how long it took me to find this video. Thank you so much. This was so helpful.
Thank for the overview. This was very helpful!
Very helpful video, actually all Hector's videos are very helpful and in my opinion the best.
Tons of Value in this!! Thank you for making this!
Hector is amazing. I’m a huge fan of his videos.
Great video Hector! Your explanations are clear and concise. I appreciate it!
Thanks Hector for another great video You are my go to when I need to resolve issues...
Thank you Hector. This is exactly what I was looking for. Thanks for all the Valuable information. 🙂
Hector is a great teacher and accountant. thank you for this video!
Hector you are phenomenal! This Video is Totally on-point!
This guy rocks! Explains things so clearly and at a level that "non-accountants" can understand.
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.
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.
Super-clear, thank you Hector. Terrific and very helpful!
I learned more from Hector's video than from my accountants/tax person! So happy I found this video!
Very informative, straight to the point.
Thanks! This was explained quite well, salary and draws!
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
Thank you. Age me a lot to think of. Glad I found your video.
Very Informative and easy to understand!
Thank you hector for lending us your helpful hands. ✋🤚
I found this to be easy to follow and get set up. also step by how to instructions are great.
Thank you, for the first time I understand this....
Another great video! Thanks Hector :)
Very helpful tips on self pay. Thank you.
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).
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
That you so much. Very helpful information and works perfectly.
You are very knowledgeable and expert.
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!
Great clear explanation!!
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.
thank you for the review
Love this guy! He makes everything so clear!
How do you go by getting an owner draw, operating as a 501(c3)
You're most welcome. Please know my team and I are always here to help. ^Alex
EXCELLENT presentation, thank you, I'll follow this presenter!
Glad you enjoyed the video, Gail! ^Emma
Great info!!
Thank you!
Excellent information. Thank you! Almost done with accounting degree 🙂
Wonderful! Just started SCorp
this was very helpful thank you. im subbed.
Greatful for Hector!!
Great video for first time small business owner! Very helpful information.
Glad it was helpful! ^Emma
Nice job, well done!
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 informative video
Excellent stuff bro
Good stuff !!
thank you, Hector!
Exactly what I was looking for!!!! Thx
We're glad to hear that this video helped! Have a wonderful day. -Kyle
I wish this video would have been around when we started our first business. Very informational.
Thank you Hector. btw, where did you get that record player stand in the background? Its super cool!
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.
Favorite CPA
Very handy information!
Hector, thank your for sharing. Do you have a video on creating W2’s for owners taking owner draws?
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 😂🤣
Excellent love it
love this
Great video sir..
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. 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.
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?
explained beautifully
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!
Thank you. Very informative. what is the entry to book owners draw, advance?
not all the way through the video but best piece of advice so far is between 3:00 and 4:00
Great information! Do you have video's regarding payroll taxes for nonprofits, 501 (c ) 3, and paying yourself as a nonprofit Executive Director?
...excellent video.
Thank you so much
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?
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
Thank you!
Nice video sir
Thank you!!
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, "
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
Thanks Hector!!!
Great content
Glad you enjoyed it!
idk this guys pretty cool i like him :)
Hey Hector you looking nice in QBO Theme dress.
Hi .. very good information , need help on considerations for my self incorporated company
Hello Hector, do you do one on one consultations ?
Your videos are amazing ! Thank you!! I need your help though on complex issue...I work for a Real Estate Investing (hard money lending) and all money is ACH . how do I record a loan, a customer payment to the loan and an investor payment to the investor for the same property? The investor pays us (funding the load) borrower makes payments to us and we pay the investors monthly from the % profits....ugh...I'm so stuck and my register is not showing every transaction. I need your help , PLEASE!!!! :-)
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!
Thank you for your helpful tips. Might I ask if you have someone in NYC that you would recommend for accounting services for my Juice bar? We use quickbooks for payroll and accounting. Thank you. Bryan Ware
Hey @Hector is there business using Quickbooks in El Salvador for accounting legal reporting? Thanks in advance
So as a sole proprietorship would you define owner draw as equity being taken out of the business when entering it in QB?
Thank u sooo much
Hi Hector what should I do if I have negative numbers on Owners draws, on the balance sheet. I was trying to do a journal entry to cero out the petty cash account and owners contribution, it did cero out those accounts but then increases the owners draws
Hi Hector. Poignant video! Q: How would you treat foregone wages by owners, in terms of balance sheet? Thank you
Thank You! Hector I have an LLC would I be tax twice if I do owner with draw
Hector I am an single member LLC. So do I look at my status as a sole proprietor? Meaning I should do owners draw?