How to pay myself as a sole trader?

Doug Laidlaw laidlaws at hotkey.net.au
Mon Apr 28 03:58:49 EDT 2008


Here in Australia, you would set up a Drawings account and debit the 
withdrawal to Drawings.

You are entitled to withdraw all the profits of the business.  Theoretically, 
you should wait until the annual statements are prepared before withdrawing 
anything.  Drawings are on account of profits.  If it turns out that you 
didn't make enough profit to cover your drawings, your capital is reduced by 
the excess.

Doug.

On Saturday 26 April 2008 1:18:42 am Tom Badran wrote:
> I'm registered as a sole trader in the uk, and up till now all my income
> has just gone straight into my business account (which is also an account
> under assets in my gnucash accounts).
>
> However i now need to transfer money from here to my personal account
> (essentially paying myself as far as i can tell). Im not sure how best to
> represent this in gnucash however. Should i set myself as the only employee
> and pay myself like that, or should i set up another asset account called
> "personal" or something and just do direct transfers from
> business->personal every time i use money for non business transactions, or
> something else?
>
> Also, with regards to national insurance (and presumably income tax when i
> get round to doing that) i currently have that just going straight into an
> expense account under Expenses->Taxes->NI. I presume thats the best way of
> doing that as it was closest to the default set of business accoutns
> gnucash sets up, but if this would be considered wrong by an accountant,
> what would be best? I only ask as the tax is on me directly rather than the
> business, so im not 100% how i should represent that.
>
> Thanks for the help
>
> Tom




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