When you have a small business, it is important to pay yourself just the right amount. You want to ensure that you can survive during the tough times. At the same time, you don’t want to pay yourself so much that you cripple the business. Remember that the business is making money for you, but it needs money to do so, so the more you invest in it, the more the payoff will be in the end.

Follow these simple tips to make sure that you pay yourself appropriately:

• Educate yourself as to how the company’s legal structure will have an effect on taxes. You must know how salaries and bonuses are taxed and how distributions to you as a shareholder are taxed. These facts will help you find the wisest pay structure.
• Determine the going rates for CEO pay in the industry. Consider business size when making these determinations. Pay yourself according to the going rate.
• Ask you accountant or lawyer. He or she surely knows a lot about how to determine pay scales.
• If you took a hit in the early years of the business, you can pay yourself back when things get going good. You put in the work and earned the rewards.