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LETS GET DOWN TO BUSINESS.

Question :
When business is still pretty fresh and there is no guaranteed income …just hope… How do I start paying myself? In a previous”business” I never paid myself but this time around I’m turning a profit and want to start paying myself something even if just small. Just want to make sure I’m doing that by the book.It won’t be a salary as such as turnover is not super high /consistent yet.Do I start on a commission based model maybe?For context : I’m a Sustainable Stylist and offer personal wardrobe styling services, personal shopping services and I resell preloved clothing ( both on consignment from Clients and items I’ve sourced secondhand)

Question submitted 23/10/20 @ 06:49am
Industry: Funding & Finance
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    Hi. Great to hear your new business is turning a profit. It’s not clear but I expect you are providing your services personally, as a sole-trader, and do not have a company. If that is the case (and it’s fine if it is), the profits you are earning will be taxed in your own name, at your personal tax rate, and you are entitled to keep the after tax profit. You don’t have to pay yourself a salary or a commission. However, if you are keeping your business and personal money separate (which is recommended), it may be helpful to transfer funds from your business account to your personal account on a regular basis. The amount you transfer should be less than the business profits after taking into account tax to ensure that you leave enough in the business to pay the tax. The amount of tax on your profits will be calculated at 10.5% on profits up to $14,000 and generally the tax will be payable after you file your tax return for the financial year ending 31 March. Best wishes.

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    Hi Darren. Thanks, mate! It is a bit blurry when turning the side hustle into a real thing so your advice is super helpful. I got a business bank account sussed part way through this financial year. And yes, rolling as a sole trader.

    Thank you for taking the time to give your advice here. I appreciate it immensely.

    Best
    Shiana
    http://www.sheshestyledthis.co.nz

    @sheshestyledthis

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