Pay Yourself Like a Grown-Up: A Simple Owner Pay System That Stops the Guessing
If you’re a business owner and paying yourself feels like… vibes, you’re not alone.
Most people do one of these:
Pay themselves whatever is left (spoiler: there’s never anything left)
Randomly transfer money and hope taxes don’t show up angry
Avoid paying themselves because it feels “safer” to keep cash in the business
Here’s the problem: when your owner pay is a guess, everything else becomes a guess too—taxes, bills, spending, even whether you’re actually profitable.
So let’s fix it with a system that’s:
simple
repeatable
not based on panic
Why this matters
When owner pay isn’t structured, you usually end up with:
surprise tax bills
inconsistent cash flow
overdrafts or credit card float
stress every time payroll, rent, or quarterly estimates come up
A good owner pay system does two things:
It pays you consistently
It protects the business from you (lovingly)
The “4-Bucket” Owner Pay System
You can do this with separate bank accounts or with tracking buckets in your bookkeeping (bank accounts are easier for most people).
Bucket 1 — Operating (Bills + business spending)
This is where income lands and where expenses get paid.
Goal: Keep the business running without crossing your fingers.
Bucket 2 — Owner Pay
This is your “paycheck” bucket. Even if you’re not running payroll, you can still pay yourself on a schedule.
Goal: Predictable pay that doesn’t change every week.
Bucket 3 — Taxes
This is the “don’t touch it” bucket.
Goal: Taxes are boring because they’re already funded.
Bucket 4 — Buffer / Profit
This is your stability bucket. It stops every minor hiccup from becoming a financial emergency.
Goal: A cushion so you’re not living invoice-to-invoice.
If you want to add a 5th bucket later, make it “Sales Tax” (if you collect it). That money isn’t yours, so treat it like it’s radioactive.
Step-by-step: set it up in 30 minutes
Step 1) Pick your pay cadence
Choose one and commit:
weekly
every other week
twice a month
monthly
My strong opinion: biweekly is the sweet spot for most owners. It feels like a normal paycheck and keeps cash flowing.
Step 2) Decide how you’ll fund taxes
This is where people get sloppy, so keep it simple.
Pick one approach:
Option A (easy): Set aside a flat % of every deposit into the Tax bucket
Option B (more accurate): Use last year’s effective tax rate as a starting point and adjust after Q1
If you’re not sure what % to use, don’t guess wildly, just use a temporary number, then adjust once you look at Q1 results.
Step 3) Create your transfer rules
Every time money comes in (or once a week), split it into buckets.
Example:
Taxes: X%
Owner Pay: X%
Buffer/Profit: X%
The rest stays in Operating
The exact percentages depend on your business, your margins, and whether you’re catching up or starting fresh, so the system matters more than the “perfect” numbers.
Step 4) Put guardrails on yourself (this is the magic)
Two rules that reduce stress instantly:
Owner Pay only comes from the Owner Pay bucket
Taxes only come from the Tax bucket
If you start paying bills from the tax account “just this once,” the whole system collapses. (Ask me how I know from watching this movie 1,000 times.)
Step 5) Build a tiny buffer target
Start small:
first goal: $500–$1,000
next goal: two weeks of business expenses
longer goal: one month of business expenses
Buffer is what turns “ugh this month is tight” into “okay, we’re fine.”
Mini example
Let’s say a service business averages $12,000/month, but it’s uneven—some months are $8k, some are $18k. Without buckets, the owner pays themselves extra in a good month, then panics in a slow month and puts everything on a card.
With buckets, they pay themselves biweekly from the Owner Pay account, taxes are funded automatically, and the buffer grows slowly. Suddenly the slow month isn’t a crisis, it’s just a slow month.
That’s the whole point.
If you want help setting your owner pay system up based on your actual numbers (not generic internet advice), I can help you build a clean plan and make sure your bookkeeping supports it.
Book a call: https://calendly.com/sara-dunhambookkeepingservices
