Pay Yourself Right
WHY
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Always know what your business must pay every month, rent, staff wages, materials, subscriptions, and insurance.
These costs are non-negotiable; your personal pay comes after covering them.
Understanding this ensures your business doesn’t run into cashflow trouble and prevents last-minute scrambling.
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Track costs that fluctuate such as project materials, seasonal marketing, and subcontractor fees.
Recognise which income is predictable and which may not arrive on time.
Adjust your pay accordingly so you never overdraw in slow months.
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Calculate what you can realistically pay yourself without compromising business health.
Use past months’ profit data and projected income to guide your amount. Safe pay gives you predictability, reduces stress, and builds confidence.
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Always leave a financial cushion for emergencies, unexpected expenses, or sudden opportunities.
A buffer protects your business from cashflow shocks and gives you peace of mind.
Treat your buffer as untouchable, only use it in true emergencies or planned investments.
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Business numbers aren’t static; review them monthly or at least quarterly. Adjust your pay based on changing income, expenses, and business priorities.
Regular review keeps your personal income aligned with business realities.
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Knowing your numbers empowers you to make decisions without fear. You can plan your lifestyle, investments, and growth strategies without guessing.
Confidence in paying yourself properly builds professionalism and supports long-term business sustainability.
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Paying tax as you go (PAYE or provisional tax) is convenient and reduces end-of-year stress.
It helps you budget and avoid surprises at tax time.
Holding tax funds can also provide short-term cashflow flexibility for investments—but only if carefully tracked.
Before you pay yourself, you need to know exactly what your business can afford. Many small business owners struggle because they don’t have a clear picture of cashflow, expenses, and profits. In this module, we’ll help you understand how to calculate what’s safe to pay yourself, manage fluctuations in income, and ensure your business stays healthy while you get paid.
EACH YEAR, OVER 50,000 NEW BUSINESSES ARE REGISTERED IN NZ, EACH WITH ITS OWN STRUCTURE AND RULES.
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EACH YEAR, OVER 50,000 NEW BUSINESSES ARE REGISTERED IN NZ, EACH WITH ITS OWN STRUCTURE AND RULES. ✦
Stop guessing how much you can afford to take each month.
Ready to take control of your income and your business? Follow along, and make this the moment you start paying yourself properly, on your terms, with confidence and clarity.
Background: Alex sells artwork and handmade jewelry, often getting irregular income from commissions and online sales.
Problem: Without knowing monthly costs for materials, marketing, and shipping, Alex risks paying himself too much and running out of cash.
Consequences:
He delays fulfilling orders because he’s short on supplies.
Personal budgeting becomes unpredictable.
Solution: Alex tracks all expenses, calculates average monthly profit, and decides a safe owner drawing he can take regularly without jeopardising operations.
Outcome: Predictable personal income, materials always funded, and stress reduced
Alex, Sole Trader
Creative / Artist
Scenario 1:
Reduce stress and know exactly where your money is going.
Ready to take control of your income and your business? Follow along, and make this the moment you start paying yourself properly, on your terms, with confidence and clarity.
Cleaning Business
Scenario 2:
Priya, Tradesperson
Background: Priya runs a small plumbing business with variable job sizes and timings.
Problem: Paying herself without knowing upcoming material or subcontractor costs leads to cash shortages.
Consequences:
Delayed payments to suppliers or staff.
Missed opportunities for larger jobs due to cashflow uncertainty.
Solution: Priya calculates her monthly cashflow, including variable job income, and sets her pay based on safe available funds, leaving a buffer for emergencies.
Outcome: Projects run smoothly, staff and suppliers are paid on time, and Priya can take consistent personal income.
Clear records, predictable income, and confidence are within reach.
Ready to take control of your income and your business? Follow along, and make this the moment you start paying yourself properly, on your terms, with confidence and clarity.
Consultant
Scenario 3:
Background: Tom’s consulting business relies on project-based and retainer income, often irregular.
Problem: He risks withdrawing too much for personal use without accounting for upcoming client payments or business expenses.
Consequences:
Missed investment opportunities in marketing or tools.
Stress from uncertainty about cash available for personal bills.
Solution: Tom monitors his projected income, upcoming expenses, and retainer schedules to calculate a safe wage and discretionary drawings.
Outcome: Personal income is predictable, business investments can continue, and he stays compliant and stress-free.
Tom, Service Provider
Reflection Questions
What are your fixed monthly business costs?
Which income sources are predictable, and which are variable?
How much can your business safely pay you each month without risk?
How can you create a buffer to handle unexpected costs?
Which of our characters’ strategies (Alex, Priya, Tom) could you apply to your business?
Conclusion
One size does not fit all when it comes to business, you are not limited by your specific trades or skills; instead, you have the opportunity to explore and expand your potential beyond what you might initially think. The best way to define your business is to make a Business Plan, this allows you to see the full picture of your business or organisation over the next 3 years.
Your Business Plan explains how you will operate, earn revenue, and handle expenses and most importantly clarifies roles and processes in your organisation.
Regularly updating your plan to include new insights and adjustments is crucial for staying relevant and achieving long-term success.
SOLE TRADER
NOT-FOR-PROFIT
COMPANY