Insights + Resources

How Business Owners Get Paid

Many business owners feel like they’re the last to get paid. This article explains a bottom-up approach to ensure you’re paid first.

How Business Owners Get Paid

Date posted: April 29, 2025
By Matt Liddle

Many business owners I speak to feel they’re last to get paid.
They feel like they pay everyone else first.
But that’s backward thinking.

Instead, you should start with what you need and work up, ensuring your business is structured to support you, not the other way around.
This bottom-up approach ensures you get paid what you need to live and thrive.
And remember, this is just your salary—we’re not even talking about business profits yet. That’s extra money on top!

Step 1: Start with Your Personal Financial Needs

Before setting your business targets, you need to know how much money you need to live.

  • Essential Living Costs – Rent/mortgage, groceries, utilities, transportation, insurance.
  • Savings & Investments – Investment property or share portfolio, emergency fund, wealth building.
  • Taxes – You don’t just need a salary—you need enough to cover personal taxes.
  • Lifestyle Goals – Family expenses, travel, entertainment, personal growth.
  • Debt Payments – Mortgage, personal loans, credit cards, etc.

What do you need for the time and energy you put in?
You should also consider a market salary for your role as a cross-check.
The salary might need to increase to meet the market, or your personal financial needs may need to change, so what you receive is sustainable for the business.

Step 2: Factor in Other Employer On-Costs

Your salary isn’t just what you take home—the business has to pay super contributions, and other employee on-costs (payroll tax, insurances, costs to run payroll and other admin).
Let’s assume a 25% on-cost figure for the example.

How much profit do you need to make to cover the most important wage – YOURS?

Step 3: Determine Your Revenue Target Based on Profit Margins

Now, reverse-engineer how much total revenue your business needs to generate.
I’ve used 20%. If it’s less, the revenue target goes up, e.g. 10% is $2.10 million of revenue to cover your market wage.

What revenue do you need to cover your wage?

Step 4: Optimise Pricing, Cash Flow & Expenses

Once you know your revenue target, the next step is making sure your business model supports it. For example:

  1. Are you pricing your services correctly? – Does your pricing structure allow for both salary and business profit?
  2. Is your profit margin high enough? – If not, should you cut unnecessary expenses?
  3. Are payment terms structured for cash flow stability? – Can you shorten your cash collection cycle?
  4. Do you have the right customers or clients? – Do you need to review the ones you have and challenge whether they fit your financial goals?

But What About Profit?

Your salary is just the baseline for your time and experience.
On top of this, you still have business profit—the extra reward for owning and running the business.

The goal isn’t just to earn a wage—to build a business that pays you properly AND generates profit.

The Takeaway

Don’t treat your salary and what you’re worth to your business as an afterthought.
Use this bottom-up approach to ensure you’re paid first, so you’re building a business that works for you, not one that keeps you working.