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Owner's draw vs payroll salary: paying yourself as an owner with Hector Garcia | QuickBooks Payroll 

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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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26 июн 2024

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Комментарии : 324   
@makellyjt
@makellyjt 2 года назад
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!
@mmmax2g
@mmmax2g 3 года назад
OUTSTANDING VIDEO..Answered a BUNCH of questions for me!!THANK YOU!
@St.CrimsonTweets
@St.CrimsonTweets Год назад
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!!
@user-ri3hc2xs2u
@user-ri3hc2xs2u 2 года назад
Clear and logical, I can't appreciate more on professional knowledgeable video like this, THANK YOU!
@ClickAndMortarMedia
@ClickAndMortarMedia Год назад
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!
@JGTaxPro
@JGTaxPro Год назад
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.
@quickbooks
@quickbooks 2 года назад
You're most welcome. Please know my team and I are always here to help. ^Alex
@reginabrealty
@reginabrealty Год назад
I can't believe how long it took me to find this video. Thank you so much. This was so helpful.
@msiplin8613
@msiplin8613 2 года назад
Hector is amazing. I’m a huge fan of his videos.
@kyannifleming6251
@kyannifleming6251 3 года назад
Thank for the overview. This was very helpful!
@backtobusiness9264
@backtobusiness9264 2 года назад
Tons of Value in this!! Thank you for making this!
@alevans2444
@alevans2444 3 месяца назад
This guy rocks! Explains things so clearly and at a level that "non-accountants" can understand.
@SteveKuban
@SteveKuban 3 года назад
Super-clear, thank you Hector. Terrific and very helpful!
@jodibiz
@jodibiz 2 года назад
Thanks Hector for another great video You are my go to when I need to resolve issues...
@shepie108
@shepie108 2 года назад
Hands down, Hector is a great teacher and accountant. Thank you for this video!
@St.CrimsonTweets
@St.CrimsonTweets Год назад
Hands down... I see what you did there.
@jessicapadillachavez8728
@jessicapadillachavez8728 Год назад
I k
@kimvergilsanchez2246
@kimvergilsanchez2246 5 месяцев назад
@@St.CrimsonTweets pun intended
@fatimarobaina352
@fatimarobaina352 2 года назад
Very helpful video, actually all Hector's videos are very helpful and in my opinion the best.
@mpalmer362
@mpalmer362 Год назад
Great video Hector! Your explanations are clear and concise. I appreciate it!
@sindysacoman6942
@sindysacoman6942 Год назад
I learned more from Hector's video than from my accountants/tax person! So happy I found this video!
@lynneborrie-belcher895
@lynneborrie-belcher895 Год назад
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!!
@HectorGarciaCPA
@HectorGarciaCPA 10 месяцев назад
awesome!
@nwboater3916
@nwboater3916 2 года назад
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 :-))
@Mary-mb9ju
@Mary-mb9ju 2 года назад
Thank you Hector. This is exactly what I was looking for. Thanks for all the Valuable information. 🙂
@helalahmed7428
@helalahmed7428 Год назад
Hector is a great teacher and accountant. thank you for this video!
@thekrystalshow7785
@thekrystalshow7785 Год назад
Hector you are phenomenal! This Video is Totally on-point!
@bcataxservicefajardo709
@bcataxservicefajardo709 Год назад
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.
@godisgreaterministries2781
@godisgreaterministries2781 2 года назад
Very informative, straight to the point.
@76LindaSue
@76LindaSue 2 года назад
Great presentation, direct and complete information on this topic, many thanks.
@beatricemoore644
@beatricemoore644 2 года назад
Thanks! This was explained quite well, salary and draws!
@joeldeboer1937
@joeldeboer1937 2 года назад
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!!!!
@HectorGarciaCPA
@HectorGarciaCPA 10 месяцев назад
love it! thanks
@JeIIyBOB
@JeIIyBOB Год назад
Thank you hector for lending us your helpful hands. ✋🤚
@jackiesmith9937
@jackiesmith9937 2 года назад
Thank you. Age me a lot to think of. Glad I found your video.
@garyguardino
@garyguardino Год назад
Very Informative and easy to understand!
@melisssamcinnis8873
@melisssamcinnis8873 2 года назад
Thank you, for the first time I understand this....
@sharonmarie5566
@sharonmarie5566 2 года назад
Very helpful tips on self pay. Thank you.
@heatherseals1977
@heatherseals1977 Год назад
Another great video! Thanks Hector :)
@prosolvehr2059
@prosolvehr2059 2 года назад
Love this guy! He makes everything so clear!
@yvonneray1333
@yvonneray1333 2 года назад
How do you go by getting an owner draw, operating as a 501(c3)
@shellybresette6373
@shellybresette6373 Год назад
I found this to be easy to follow and get set up. also step by how to instructions are great.
@judylichtenberger805
@judylichtenberger805 2 года назад
Greatful for Hector!!
@fonderrelionel4008
@fonderrelionel4008 25 дней назад
Hector, you are amazing, thanks for the videos
@et8003
@et8003 3 года назад
Thank you for this easy to follow explanation. SUBSCRIBED!!!!!! Thanks you again
@quickbooks
@quickbooks 3 года назад
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).
@miguelzanartu2130
@miguelzanartu2130 3 года назад
thank you for the review
@ALMBusinessInstitute
@ALMBusinessInstitute 2 года назад
Great clear explanation!!
@julieeanderson945
@julieeanderson945 2 года назад
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.
@taxdebtresolutionaccountin5625
You are very knowledgeable and expert.
@mariaacosta8119
@mariaacosta8119 2 года назад
Great info!! Thank you!
@ZumbawithStacey
@ZumbawithStacey 2 месяца назад
That you so much. Very helpful information and works perfectly.
@77Tadams
@77Tadams Год назад
Wonderful! Just started SCorp
@CORNERSTOW
@CORNERSTOW 2 года назад
this was very helpful thank you. im subbed.
@gailtullymidwife
@gailtullymidwife 2 года назад
EXCELLENT presentation, thank you, I'll follow this presenter!
@quickbooks
@quickbooks 2 года назад
Glad you enjoyed the video, Gail! ^Emma
@AndreaShink
@AndreaShink 2 года назад
thank you, Hector!
@PilotDiggerdavid
@PilotDiggerdavid Год назад
Nice job, well done!
@timcorrigan6462
@timcorrigan6462 3 года назад
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.
@HectorGarciaCPA
@HectorGarciaCPA 2 года назад
I am glad you liked it!
@joshuacaylor881
@joshuacaylor881 Год назад
Excellent information. Thank you! Almost done with accounting degree 🙂
@DSV33
@DSV33 2 года назад
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! 😉
@St.CrimsonTweets
@St.CrimsonTweets Год назад
"All hands" on deck 😂🤣
@domdompomodoro6621
@domdompomodoro6621 3 года назад
Good stuff !!
@danieljuarez7794
@danieljuarez7794 3 года назад
Great video for first time small business owner! Very helpful information.
@quickbooks
@quickbooks 3 года назад
Glad it was helpful! ^Emma
@kathrynmaloney2333
@kathrynmaloney2333 8 месяцев назад
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
@clarencehopkins7832
@clarencehopkins7832 2 года назад
Excellent stuff bro
@TofuInc
@TofuInc 2 года назад
I wish this video would have been around when we started our first business. Very informational.
@crystalharris-brown2762
@crystalharris-brown2762 2 года назад
Very informative video
@crystalb6428
@crystalb6428 2 года назад
Favorite CPA
@DeekJohnson
@DeekJohnson 5 месяцев назад
Exactly what I was looking for!!!! Thx
@quickbooks
@quickbooks 5 месяцев назад
We're glad to hear that this video helped! Have a wonderful day. -Kyle
@sugeirisvargas9256
@sugeirisvargas9256 Год назад
Excellent love it
@Extensionsbycandace
@Extensionsbycandace 10 месяцев назад
love this
@utleyadmin9679
@utleyadmin9679 Год назад
Great video sir..
@josepalacios4975
@josepalacios4975 7 месяцев назад
Very handy information!
@nwbw217
@nwbw217 11 месяцев назад
explained beautifully
@JoseJRamos-dh2cn
@JoseJRamos-dh2cn 2 года назад
Thank you!
@niameanspurpose
@niameanspurpose 2 года назад
...excellent video.
@1Winoh
@1Winoh 2 года назад
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.
@aliensuperstar5134
@aliensuperstar5134 2 года назад
Thank you!!
@user-gk8qy7ei9e
@user-gk8qy7ei9e 2 месяца назад
Thank you so much
@maryerhart5754
@maryerhart5754 Год назад
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.
@gpmhb5622
@gpmhb5622 2 года назад
Thank you Hector. btw, where did you get that record player stand in the background? Its super cool!
@SoniaBDorsey
@SoniaBDorsey 3 года назад
Thanks Hector!!!
@JinnLLC
@JinnLLC Год назад
not all the way through the video but best piece of advice so far is between 3:00 and 4:00
@austinhobson7918
@austinhobson7918 2 года назад
This guy has huge hands.
@DSV33
@DSV33 2 года назад
🤣🤣🤣
@stevec404
@stevec404 2 года назад
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.
@yellowboat8773
@yellowboat8773 Год назад
Just following up a year later... Did you end up starting this business?
@dianamontes8426
@dianamontes8426 Год назад
Hector, thank your for sharing. Do you have a video on creating W2’s for owners taking owner draws?
@theodoreroberts3407
@theodoreroberts3407 Год назад
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.
@manoharmanohar8400
@manoharmanohar8400 2 года назад
Nice video sir
@abbibrennen2549
@abbibrennen2549 Год назад
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, "
@leomalinda2467
@leomalinda2467 11 месяцев назад
Great content
@HectorGarciaCPA
@HectorGarciaCPA 10 месяцев назад
Glad you enjoyed it!
@esological
@esological Год назад
this guy has catchers mitts for hands
@SERGE_Tech
@SERGE_Tech 2 года назад
idk this guys pretty cool i like him :)
@nansimbisharifah1675
@nansimbisharifah1675 Месяц назад
Thank u sooo much
@Tarasstelmakh
@Tarasstelmakh 2 года назад
Thanks
@SistersInSyncInc
@SistersInSyncInc Год назад
Great information! Do you have video's regarding payroll taxes for nonprofits, 501 (c ) 3, and paying yourself as a nonprofit Executive Director?
@amaurysanchez3450
@amaurysanchez3450 2 года назад
I like this guy I feel like I’m in good hands.
@Gibran1517
@Gibran1517 2 года назад
Made me lol
@DSV33
@DSV33 2 года назад
🤣
@DSV33
@DSV33 2 года назад
He seems like a person who would be a very good helping hand!
@brandonacklin1913
@brandonacklin1913 2 года назад
Nice
@akgt1073
@akgt1073 2 года назад
Hey Hector you looking nice in QBO Theme dress.
@dorothyjones8312
@dorothyjones8312 Год назад
Thank you. Very informative. what is the entry to book owners draw, advance?
@TrudyBeermanPSITV
@TrudyBeermanPSITV 3 года назад
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.
@HectorGarciaCPA
@HectorGarciaCPA 3 года назад
Wow, that was a decade ago! I remember you and your mom... its was at my Davie Training center...
@TrudyBeermanTheBibleOnBusiness
@TrudyBeermanTheBibleOnBusiness 3 года назад
@@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
@kinndylodz
@kinndylodz 2 года назад
Hi Trudy!!! Do you remember me?
@kinndylodz
@kinndylodz 2 года назад
@@pausefornow Primerica
@keithhudson1358
@keithhudson1358 2 года назад
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
@gpad2925
@gpad2925 Год назад
Excellent point and very true
@rayzucchero9478
@rayzucchero9478 2 года назад
Hi Hector. Poignant video! Q: How would you treat foregone wages by owners, in terms of balance sheet? Thank you
@JosephHawkins
@JosephHawkins 2 года назад
There is a tax advantage to owner draw over salary - Owner draw is not subject to Medicare tax but Salary is - this saves 2.9%.
@1Winoh
@1Winoh 2 года назад
Or social security 12.4%
@bsnuff2002
@bsnuff2002 2 года назад
What about applying for things like home loans? Isn't it easier to get a loan with salary because it's "guaranteed" income?
@fresh5237
@fresh5237 2 года назад
As a self employed business is it possible I can set up quick books to deposit money to me through by business but set up to we’re it takes 15.3 percent each deposit to keep up with the quarterly pay
@Georgescpaman
@Georgescpaman 2 года назад
True there is a savings, but as an S-Corp, you are circumventing Social Security laws (and could potentially lose S-Corp status), if your Draws/Distributions are consistently higher than your Salary. You would also close yourself off to personal loans, as banks focus on consistent income, such as a Salary, that is not tied to profits. Draws/Distributions are not viewed as Income by the banks, as it is a measure of profitability of the business, which is not a factor in their calculations, especially if it is a personal loan vs business loan - like for a personal home mortgage.
@Georgescpaman
@Georgescpaman 2 года назад
Bingo - 100%
@irfanpasha9219
@irfanpasha9219 2 года назад
Hi .. very good information , need help on considerations for my self incorporated company
@ramzee2581
@ramzee2581 2 года назад
Hello Hector, do you do one on one consultations ?
@karatedud3
@karatedud3 2 года назад
This guy's hands are huge!!!
@dougadkins7247
@dougadkins7247 23 дня назад
Thanks a lot... Now I can't stop staring...
@christopherspringer3263
@christopherspringer3263 2 года назад
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?
@princessleah7457
@princessleah7457 2 года назад
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!!!! :-)
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