Drawings vs Salary??? HELP!

[cherikey]

Hi Everyone

I am very new to this forum and will be here regularly asking for help. I've just started doing my own books for my cc and was wondering how to post money that i pay myself? Do I post it as drawings or salary? Does it make a difference if the amount changes every month? I'm currently using Omni software for my bookkeeping...

Any advice would be great.

Thanks,

Cheries

[geraldenek]

there is a difference tax wise for both

Drawings:
Drawings would normally be paid to the members loan (if you have for instance started the business and borrowed money you will have a credit loan) with taking drawings this loan will decrease untill the point where you owe the company money - if you owe the company money then you will pay dividends tax on this amount.

Salary:
Taking a monthly salary (depending on the amount) you will have to pay PAYE and UIF.

In either case it does not matter if the amount fluctates.

My suggestion would be - consult someone with regards to your tax as you are playing around with company and your tax and no one would like to pay more tax than he should.

[cherikey]

Thank you so much geraldenek.