If you are running a company and need to manage payroll system yourself from your own company, then you have some choices. These following ways can help you to get the salary from your own company.
4 Ways To Get The Salary From Own Company
1. Formal Wage
In this system, your money can be transferred to your account from the account of the company. This process will be done every month. At the end of the year, the gross amount of the transferred money is considered as the annual wage. There are some rules and regulations for going under the system. You need to be registered as the wage payer, and you need to submit the quarterly statement as per rule to the ATO.
2. Pay As A Contractor
In this case, the company pays a certain amount of money to you, and that amount is mentioned as your income in the personal tax return. This is one of the most useful, fast and easy methods that demand a personal ABN. In this system, the company need not be registered as Wager. In this method of getting the payment, you get some deduction in personal payment, but there is always a limitation. This can help your company to get a deduction on tax.
3. Pay As The Dividend
This is another method of getting paid from your own company. In this case, you can be paid by the company after clearing tax. The payment is carried out after clearing all taxes from the profit. In this method, you can keep the salary yourself tax-free.
4. Drawing Money From Company
If you have invested in a company, then you have the right to a certain amount of its profit. But if you take more money from the company than your portion then it is considered as borrowing money from the company. The shareholders of the companies can borrow money, but they need to return them with interest and the formalities are similar to take the loan from a financial agency. You need to go through the formalities to get the loan from the company.
These points mentioned above are given to let you know how you can save your money by getting the right amount of money from the company. What is the procedure and what are the benefits of these payment methods are important to know? It is always better to talk to the finance professionals who can suggest you the best.