How to Pay Yourself From an LLC
Owner's draws, the 15.3% self-employment tax, quarterly estimates, multi-member LLCs, where Gusto fits and when an S corp helps.
Written guide
How to pay yourself from an LLC
You own an LLC. So how do you actually pay yourself, and what do you owe in taxes? Here's the plain-English answer, and where Gusto fits in.
The short answer
The short answer. With a regular single-member LLC, you pay yourself with an owner's draw. You don't put yourself on payroll, and you pay tax on the business profit.
Check how your LLC is taxed
First, check how your LLC is taxed. In this real Gusto account the business is an LLC, and S corporation taxation is set to no. That one setting changes how you pay yourself.
Default LLC = self-employed
By default, the IRS treats LLC owners as self-employed. That means you're not an employee of your own LLC, so you don't run payroll for yourself.
Take an owner's draw
Step two. Take an owner's draw. You simply move money from the business bank account to your personal account. No taxes are taken out when you do it, so keep a record of every draw.
Self-employment tax: 15.3%
Here's the catch. You owe self-employment tax of fifteen point three percent. That's twelve point four for Social Security and two point nine for Medicare. It's based on your net profit, not on how much you draw.
Social Security cap in 2026
In twenty twenty six, the Social Security part stops at one hundred eighty four thousand five hundred dollars of earnings. Medicare has no cap. And regular income tax comes on top of that.
Pay quarterly estimates
Step three. Because nothing is withheld, you pay estimated taxes four times a year on Form ten forty E S, usually in April, June, September, and January. Set money aside from every draw so you're never caught short.
Multi-member LLC?
If your LLC has more than one owner, it's taxed like a partnership. Owners take draws or guaranteed payments, and each owner gets a K one for their tax return.
Where Gusto fits
So where does Gusto fit? Gusto runs payroll for your employees and pays your contractors, and it lets you record owner's draws for owners. Draws don't withhold taxes, so your estimates still matter.
When an S corp can help
As profits grow, many LLC owners elect S corporation taxation. Then you pay yourself a salary through payroll plus distributions, which can lower self-employment tax. It also adds payroll and extra costs, so watch our S corp video and talk to a tax pro.
Avoid these mistakes
Avoid the big mistakes: mixing personal and business money, skipping your quarterly estimates, and drawing more than the business can afford.
Recap
Quick recap. LLC owners take draws, owe fifteen point three percent self-employment tax on profit, pay estimates every quarter, and can look at an S corp as they grow. This is general information, not tax advice.
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