How much can I pay myself
Not everything that lands in your account is yours: there is tax you collect for the tax authority, business costs and taxes you will pay later. Work out how much you can take out this month without coming up short later.
How much money you can take out of your business each month
Enter what you collected this month, the sales tax included in that money, your business costs and the percentage you set aside for income tax. The calculator tells you how much you can take for yourself without coming up short when payments fall due.
Example: you collected 3,630, of which 630 is VAT you will have to pay over. With 800 of costs, your profit is 2,200; setting aside 25% (550) for tax, you can take out 1,650, or 45.5% of what you collected. If you spent everything left after costs (2,830), you would be 1,180 short when the bills arrived.
How it is calculated
- Own income = amount collected − sales tax you collect on behalf of the tax authority (VAT or similar).
- Reserve = (own income − costs paid and pending) × the percentage you enter.
- You can take = amount collected − sales tax − costs − reserve − business cushion.
Assumptions
- Count only what you have already been paid, not what you have invoiced and not yet collected.
- The reserve is your own estimate for income tax and social contributions, not any country's tax calculation.
Frequently asked questions
Why can't I spend everything I collect?
Because part of that money is not yours: you must pay over the VAT or sales tax you charge customers, and you will pay income tax and contributions on your profit later.
What percentage should I set aside for tax?
It depends on your country, how much you earn and your legal structure. The calculator applies no tax rules: ask your accountant for an estimate and use it here.
Do I count what I invoiced or what I collected?
Only what you collected. An unpaid invoice is not money you can spend yet, even if it counts as income in your accounts.
What is the business cushion for?
To cover slow months, late payers or unexpected costs without putting in your own money. Leave something in the business account before taking money out.
What if the result is negative?
It means what you collected does not cover taxes, costs and reserves. You should not take anything out that month and it is worth reviewing prices, costs or payment terms.