The salary you never pay yourself
Your business makes money. So why is there never anything left for you? Because you pay everyone before yourself, and yourself last, if at all.
Gospodinolog
Picture a hairdresser in Munich. Let's call her Ana. Her calendar is full, her clients love her, and last year her salon brought in around 6,000 euros a month.
Ask Ana how much she earns and she goes quiet. She doesn't know. Money comes into one account, rent, products and the chair lease go out of the same account, and whatever is left at the end of the month is whatever is left. Some months 1,500. Some months 200. In spring a letter arrives from the tax office, and the whole year's savings disappear in one payment.
Ana is not bad with money. She has simply never decided what her own share is.
Revenue is not income
The number in your account is not your money. Part of it belongs to the tax office, part to your suppliers, part to next month's rent. When all of it sits in one place, your brain sees one big number and spends as if it were all yours. Then reality arrives in the form of a tax bill.
If you pay yourself last, you are working for everyone except yourself.
The 4 account system
The fix is boring, and it works. You open a few extra accounts, most banks in Germany and Austria do this for free or for a few euros a month, and every time money comes in, you split it the same day.
- Income. Everything clients pay lands here first. Nothing is paid out of it directly.
- Tax. A fixed percentage of every payment goes here straight away and stays untouched. Ask your tax adviser for your number; for many self-employed women it is somewhere between 25 and 35 percent.
- Your salary. A fixed amount you transfer to your private account on the same day every month. Small at first, but fixed.
- Business. Everything else, for rent, products, tools and a reserve for weaker months.
The point is not the exact percentages. The point is that every euro has a job before you get the chance to spend it.
What it looks like with real numbers
Back to Ana. In a month with 6,000 euros of income it looks roughly like this:
- 1,800 euros to the tax account, 30 percent, untouched until the tax bill comes.
- 1,500 euros to her private account as salary, on the 1st of every month.
- 2,700 euros to the business account for the chair lease, products and a small reserve.
In a weak month her salary stays the same and comes out of the reserve. In a strong month the extra goes into the reserve, not into something nice the same afternoon. After 6 months Ana knows exactly what she earns, and the letter from the tax office is no longer a disaster, just a transfer.
These numbers are an example, not a plan for you. Your tax rate, your costs and your salary are yours to set, ideally together with your tax adviser.
Why women in particular skip their own salary
Because paying yourself feels like taking something away. From the business, from the family, from the kids. So you leave your money in the business just in case, and pay for household things out of it here and there, where nobody sees it. A few years later, nothing that anyone can see is yours.
A fixed salary makes your contribution visible. To your partner, to your bank, and most of all to you.
“From this month on I pay myself a salary on the 1st. Me first, then everything else.”
Your first step this week
- Look at your last 3 months and write down total income, total costs and what you actually took home.
- Open one separate account for tax. Only that one, if everything else feels like too much right now.
- Pick a salary you could pay yourself even in a bad month, and put the transfer in your calendar for the 1st.
It will feel small at first. That's fine. What matters is that from now on there is a line in your business with your name on it.
Gospodinolog