Cash Drawings – Paying yourself from your business
The implications of cash drawings from your business. Many people find this complex and we’re here to help. If you wish to have any issues clarified further, call MacNicoll Accountants Warkworth on 09 425 7719.
Drawings are not a deductible expense regardless of whether you operate as a sole trader, partnership or through a company. As drawings are not a deductible expense, they are not separately disclosed in the tax calculation but they will form part of the accounts disclosure which accompanies the tax return to IRD.
Salaries paid by companies or partnerships on the other hand will be a deductible expense against business income but then will be taxable in the recipient’s hands at their marginal tax rates.
Circumstances will be different for everyone, and it’s important that you get this right. Please contact us if you want to discuss this further with us.