Salary V T/O:

[GPSS]

If you had a company with a t/o of say £350k pa, what would you as a director expect to be paying yourself as a salary, or what percentage of T/O can you expect to pay yourself. I know this figure will vary greatly from B2B, but just curious. Cheers

[odyssey2200]

depends on the retained profit surely?

[bogie]

as above ...could be anything from err £340K salary to nothing !...no-one can tell on here, youd need to know the business at least and see the last few years accounts for a best guess.

For example I know of a lovely village pub thats up for sale, turnover is about £500K p.a. out of which £50K is landlords salary ...so thats 10% out of a highly sucessful pub, with staff and lease to pay etc.

[V8mate]

If it's a small company (i.e. the director owns all the share capital) the director has two sources of personal income - a salary and dividends on profits.

A VERY basic way of looking at it might be:

Turnover
Less VAT
Less Wages to employees
Less Business Costs - i.e. the costs of doing what the business does

Leaves a small pile of cash. From this, the director can draw a salary and on the remainder, the profit, pay tax and then receive dividends. The director may choose to take a small salary and then top up his income with dividends from the profits (assuming the company makes any!)

In larger companies, non-shareholding directors may be paid larger salaries as they would receive no dividend income.

[srebbe64]

Turnover is irrelevant, what matters is operating profit. My own view is pay yourself less than you can afford and put money away for a rainy day

[Eric Mc]

As all the sensible peeple have said, turnover is an almost meaningless figure. Profitability is the main consideration.

Also, the future growth of the company may require that profits generated in the business are reinvested in assets or growing market share etc so the directors/shareholders may not want to draw sums out for themselves as they allow the business to grow.