For an LLC, the owner or owners can receive a draw or guarantee payments from the business. The draw must be reasonable and documented in the records of the LLC. To pay yourself from the LLC, you will need to make sure your LLC has a business bank account and issue yourself a check or transfer the funds electronically to your personal bank account. You will also need to make sure you document the transaction, including the date, the amount, and the purpose of the draw or guaranteed payment. Additionally, you may need to pay taxes on the income you draw from the LLC.
If you are an LLC taxed as a partnership, you take draws and do not need a payroll system to process your payments. Any business profits will pass-through to your personal tax return where your self-employment taxes will be calculated.
If you are an LLC taxed as S Corp, you must pay yourself salary (reasonable compensation). You may need assistance with a third-party payroll provider (e.g Gusto).
Always talk to your accountant prior to making any payment decision to you or any member of your LLC.
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In the meantime, we invite you to download any of our free resources that have been built to support entrepreneurs in the food service, construction, and real estate development and investment spaces