Payroll is complicated! Setting up payroll can seem even more complicated.
This video walks you through the Payroll Set Up in your Collective Dashboard.
It is a MUST WATCH before your first attempt.
Confused about Reasonable Compensation?
Since payroll is a new concept as an S Corp, the majority of our members have questions here. The biggest question being, "how much should I pay myself?"
While you are setting up your payroll mechanics, there will be a section related to your reasonable compensation. An S Corp owner is required to pay themselves what the IRS deems a “reasonable salary” — basically, a paycheck comparable to what other employers would pay for similar services. But with a few variations since you are also the business owner.
We don't expect you to live off of this salary, but continue to take shareholder distributions as needed.
Please take a look at these articles for some more guidance on deciding on the right reasonable compensation for yourself:
If you are still unsure, pick an amount that feels close to the right amount and your Onboarding Accountant can help you adjust the amount if needed.
Email [email protected] if you run into any questions not covered in the video.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.