How To Pay Myself From My LLC: An Owner’s Guide (2026)

Ways to Pay Yourself From an LLC

One of the many benefits of an LLC is flexibility, but your options can sometimes be overwhelming. Depending on the relevant LLC ownership structure and tax classification, paying yourself may happen in a few ways.

Paying Yourself as a Single-Member LLC

When you have a single-member LLC, you generally pay yourself through an owner’s draw. That means you transfer funds from the business to your personal account.

Paying Yourself From a Multi-Member LLC

Multi-member LLCs have two payment options: owner’s draw and guaranteed payments. The owner’s draw is much more common, and it’s also less logistically complex.

Owner's Draw vs. Guaranteed Payments

With an owner’s draw, profits are proportionally distributed to owners based on the LLC’s operating agreement. With guaranteed payments, owners receive set salaries that are written off as a business expense.

Paying Yourself With an S Corp Election

If you elect to have your LLC taxed as an S corporation, all owners become employees of the company and receive regular salaries. The LLC withholds taxes on these salaries, pays payroll taxes and issues each owner a W-2.

If the LLC generates profits in excess of these salaries, profits may be distributed to members as well.

Taxes You Owe on Your Pay

LLC taxes depend on how you take your pay:

• For an owner’s draw, you’ll owe income and self-employment taxes, and you must make estimated tax payments.
• For guaranteed payments, each owner is responsible for income taxes and self-employment taxes on their share of the LLC’s profit, not just what they withdraw.
• If your LLC is taxed as an S corp, the LLC pays the employer portion of payroll taxes on your salary, and you pay income tax and the employee’s share of payroll tax.

This is where the potential advantage of being taxed as an S corp comes in. If you receive distributions beyond your salary, you don’t have to pay self-employment tax on those distributions. However, federal income taxes (and state income taxes, if your state has them) apply.

How Much Should You Pay Yourself?

If your LLC isn’t taxed as a corporation, you owe taxes on all profits regardless of what you pay yourself. If your LLC is taxed as an S corp, deciding what to pay yourself is a weightier decision.

The IRS requires each owner to take reasonable compensation. That generally means compensation in line with what those in similar roles may receive. Salaries that are too high or too low may draw IRS scrutiny.