Pay Yourself Right
WHY
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Drawings allow you to take money when the business makes a profit.
You can adjust your withdrawals based on your monthly income and expenses.
Best for business owners who value flexibility over a fixed pay structure.
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Fixed wages help with personal budgeting because you know exactly how much money you’ll receive each pay period.
Wages include PAYE and other statutory obligations, keeping you compliant with tax laws.
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Some small businesses benefit from a fixed wage for essentials, plus additional drawings for surplus profits.
This ensures predictable personal income while maintaining flexibility for investment or growth.
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When you process your taxes regularly through PAYE or provisional tax, you avoid the stress of a large end-of-year bill.
This method helps you budget more reliably and prevents surprises at tax time.
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If you leave tax funds in the business temporarily, you may use them to fund short-term investments or cover urgent expenses.
This can help your business grow faster but requires careful tracking to ensure you don’t overspend.
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Regardless of method, keeping finances separate provides clarity, reduces mistakes, and supports better planning.
Taking money from your business isn’t one-size-fits-all. How you pay yourself depends on your business structure, income consistency, and personal financial goals. In this module, we’ll break down the difference between owner drawings and wages, show how each works for different types of business owners, and help you decide the approach that gives you both stability and flexibility.
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 is a sole trader.
Problem: He doesn’t understand whether he should pay himself as a “drawing” or a fixed wage. He wants flexibility but also stability.
Solution: Alex chooses owner drawings because he’s a sole trader and income fluctuates monthly. He sets a target amount per month but can adjust if sales are lower or higher.
Outcome: Alex maintains personal income flexibility, can plan purchases and materials, and keeps simple records in his bookkeeping system
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 her plumbing business as a sole trader but has staff.
Problem: Priya wants predictable personal income while making sure she can pay staff and suppliers. She’s unsure whether to treat her pay as drawings or wages.
Solution: Priya uses a hybrid approach: she treats her owner pay as a fixed “monthly wage” drawn from profits. It’s technically a drawing, but she treats it like a regular salary to stabilise her personal finances.
Outcome: Priya enjoys consistent personal income while keeping her business cashflow under control. She can plan for staff wages and material purchases confidently.
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 operates a consulting company set up as a limited liability entity.
Problem: As a company owner, he is required to pay himself through PAYE for tax compliance but also wants to access extra profits.
Solution: Tom takes a fixed wage via PAYE for stability and does additional drawings from profits when the company cashflow allows.
Outcome: Tom meets legal and tax obligations, enjoys predictable personal income, and can reinvest or take bonus profits without risk.
Tom, Service Provider
Reflection Questions
Which payment method matches your business structure?
Do you need flexibility or predictability more for your personal budgeting?
How could using the wrong method create stress or cashflow issues?
Which approach would Alex, Priya, or Tom use in your situation, and why?
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