Do I need to pay superannuation on my own wages as a director?

If you are paying yourself wages as a director or employee of your company, superannuation will generally need to be paid at least at the Super Guarantee rate. This is separate from any personal super contributions you might choose to make.

Why is profit different from cash when deciding my own pay?

Profit is an accounting measure and can include income not yet collected and expenses not yet paid. Cash is the money actually sitting in your bank account after GST, BAS, super, wages and other commitments. A business can show a profit on paper and still feel short of cash. Owner pay should consider both profit and actual cash flow.

How to Pay Yourself as a Business Owner in Australia

Q: How much should I pay myself as a business owner in Australia?

How much you should pay yourself depends on your business structure, profit, cash flow and tax position. Sole traders usually take drawings from profit, while company directors often use a mix of wages and dividends. It is important to base your pay on real numbers, not just the bank balance on a good day.

Q: Can I pay myself a wage as a sole trader?

No. Sole traders cannot pay themselves a wage in the same way an employee is paid. Instead, they take drawings from the business and pay tax on the net profit of the business through their individual tax return.

Q: What is the best way to pay myself from a company?

Many company directors use a combination of regular wages and dividends. Wages provide stable income, PAYG withholding and super, while dividends allow profits to be distributed when cash flow and tax outcomes are clear. The right mix depends on your situation and should be reviewed regularly with up-to-date financial reports.

If you are wondering how to pay yourself as a business owner in Australia, you are not alone. The right amount depends on your structure, profit, cash flow and tax position — not just the balance in your bank account on a good day.

1. Why paying yourself properly matters

Taking money out of your business without a plan can quietly damage cash flow, create tax problems and make it hard to see whether the business is truly profitable.

You avoid nasty ATO surprises later.
You keep enough working capital in the business.
You clearly separate business and personal money.
You can plan wages, super and BAS with confidence.

If you are not sure how much “spare cash” the business really has, start with your working capital and cash flow position. This is often where the real constraint sits.

2. Your business structure decides how you pay yourself

2.1 Sole trader

As a sole trader you do not pay yourself a wage. You take money out as drawings. Drawings are not a tax deduction. Instead, your tax is calculated on the overall profit of the business and included in your individual tax return.

2.2 Partnership

In a partnership, each partner usually takes drawings and then pays tax personally on their share of the partnership profit. The details depend on the partnership agreement, but the principle is similar to a sole trader.

2.3 Company (Pty Ltd)

A company is a separate legal entity. Directors and shareholders are usually paid through:

Wages through payroll, with PAYG and super.
Dividends from after-tax profits.
Director loan accounts (which must be managed carefully).

Most growing companies use a mix of wages (for regular income and super) and dividends (for flexibility once profit is clear).

3. Ways to pay yourself – simple comparison

Each method of paying yourself has different tax, super and cash flow implications. This table gives a simple high-level comparison:

Wages vs drawings vs dividends

Method	Who uses it	Tax treatment	Super	Best for
Wages	Company directors and employees	PAYG withheld and reported via STP, taxed as personal income	Super generally payable at the Super Guarantee rate	Stable, predictable personal income
Drawings	Sole traders and partners	Taxed via the owner’s personal tax return on total business profit	No compulsory employer super (you can still contribute personally)	Simpler structures and smaller operations
Dividends	Shareholders of a company	Paid from after-tax profit, often with franking credits	No super payable by the company on dividends	Distributing profit once cash flow is stable

For general background on business income types, see the ATO’s guidance on business income. Always consider your own structure before relying on examples from others.

4. How to pay yourself as a business owner – setting the amount

There is no single “correct” figure, but there is a sensible process. Instead of asking, “What do I want to pay myself?”, ask:

What is my average monthly profit (after expenses)?
How stable is my cash flow from month to month?
What do I need to set aside for GST, PAYG and super?
How much working capital does the business need to operate safely?

Many owners run into trouble by paying themselves based on revenue or the current bank balance rather than profit and upcoming obligations.

If you are not sure why your bank balance doesn’t match your profit, our article on why profit isn’t the same as cash flow is a helpful place to start.

5. Paying yourself wages – payroll, PAYG and super

If you are paying yourself wages as a director or employee, the business needs to treat you like any other staff member for payroll purposes:

Process wages through payroll and Single Touch Payroll (STP).
Withhold PAYG and report it to the ATO.
Pay super at the current Super Guarantee rate.
Plan for changes such as Payday Super, where super will move to payday.

You can read more about employer super obligations on the ATO – Super for Employers page. For a deeper dive on Payday Super, see our Payday Super guide for small businesses.

6. Common pay-yourself mistakes we see

Transferring money out whenever the bank balance looks healthy, with no tax provision.
Using the company account for personal spending without tracking it properly.
Ignoring super until the due date and then struggling to pay it.
Not setting aside GST and PAYG, leading to ATO payment plans.

These problems are often avoidable with regular bookkeeping, clear reports and a simple owner pay plan.

7. How bookkeeping helps you pay yourself with confidence

Clean, up-to-date bookkeeping makes it much easier to decide how much you can safely pay yourself. Each month, you should be able to see:

True profit for the month and year-to-date.
Your cash position, including upcoming commitments.
What has been set aside for GST, PAYG and super.
How much buffer is left for slow months or new opportunities.

This is exactly why many owners move to monthly Xero bookkeeping with clear profit and cash flow reports. You can see how we support this here: bookkeeping services for small businesses.

8. FAQs – paying yourself as a business owner

8.1 How much should I pay myself as a business owner in Australia?

The amount depends on your structure, profit, cash flow and upcoming obligations. A common approach is to pay yourself a consistent amount that your business can comfortably afford, review it regularly, and avoid emptying the account after a good month.

8.2 Can I pay myself a wage as a sole trader?

No. Sole traders take drawings, not wages. Your tax is worked out on the profit of the business and reported in your individual tax return.

8.3 What is the best way to pay myself from a company?

Many directors use a mix of regular wages (with PAYG and super) plus dividends when the company has sufficient after-tax profit and cash. The right balance depends on your circumstances and should be reviewed regularly.

8.4 Do I need to pay super on my own wages?

If you are paying yourself wages as an employee or director, super will usually need to be paid at the Super Guarantee rate, the same as for other staff.

8.5 Why is profit different from cash when deciding my pay?

Profit is an accounting measure. Cash is what is actually available in your bank account. Timing differences (invoices, stock, BAS, super) mean you can show a profit on paper but still feel short on cash. Your pay should take both profit and real cash flow into account.

9. Need help setting this up?

RJ Partnering helps Melbourne business owners put structure around how they pay themselves by combining solid bookkeeping, clear reporting and practical advice on cash flow. We work with Xero and other systems to give you reliable numbers you can actually use.

If you would like support with monthly bookkeeping, payroll or financial control, you can read more about our services here: financial controlling and business partnering.

General guidance only – not personal tax advice. For detailed rules and examples, see:
• ATO – Business income and deductions: ato.gov.au
• Fair Work – Employee and pay information: fairwork.gov.au

RJ Partnering is a registered BAS Agent. Tax agent services are provided under the supervision of a registered Tax Agent (Agent No. 26233096). This information is general in nature and does not take into account your personal situation.