One of the most common questions we hear from business owners across Kent is:
“How do I pay myself?”
Whether you’re self-employed or running a limited company, it’s important to pay yourself properly—and avoid trouble with the taxman later on.
At Soldi Partners we help local businesses take the confusion out of the numbers. Here’s a simple, no-jargon guide to paying yourself, whatever your setup.
If You're a Sole Trader
If you’re self-employed, you and your business are legally the same—which means:
You don’t get a “salary” like an employee
You can take money out of the business as and when you need it
This is called drawings, and it’s not taxed when you take it—it’s taxed through your Self Assessment on your profits.
Tip: Keep your business and personal bank accounts separate. It makes tracking income and expenses much easier.
If You Run a Limited Company
A limited company is a separate legal entity. So even if you own it, you’re technically an employee and a shareholder. This gives you two main ways to pay yourself:
1. Salary
You pay yourself a regular wage through PAYE (just like any employee)
You’ll need to register for payroll and pay tax and National Insurance
2. Dividends
These are payments from the company’s profit after tax
You’ll usually pay less tax on dividends than on salary
Most small company directors do a combination of both—a small salary and top up with dividends for tax efficiency.
What’s the Most Tax-Efficient Way?
That depends on:
How much profit your business makes
Whether you have other income
If you’re employing others
Your long-term goals (saving for a mortgage, pension, etc.)
The best approach is often a custom mix, and we can help you figure it out.
Don’t Just Take Money Without a Plan
Whatever your setup, here’s what to avoid:
Taking cash from the till or bank account without recording it
Mixing business and personal spending
Forgetting to set aside money for tax
A little planning now can save you a lot of stress (and penalties) later.
Need Help Figuring It Out?
At Soldi Partners we’re a small Kent based accountancy firm that speaks plain English. We’ll help you:
Understand your legal options
Plan your payments the tax-efficient way
Avoid common pitfalls with HMRC
Whether you’re just starting out or want to take more from your growing business, we’re here to support you.
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