Paying yourself whatever is in the account after the rent clears feels fair, but it means $2,000 one week and nothing the next. It also means you can spend the ATO’s share, because it sits in the same account.
We think you should pay yourself a fixed amount every week, on the same day as the pay run, and treat it like any other bill. The amount comes from what a normal week leaves, after the ATO’s share. Your structure decides how the money gets to you: sole trader, company or trust. Whichever it is, move the ATO’s share into a separate account every week.
Start with what a normal week leaves
Take an ordinary week, not your best one. On a venue doing $20,000 a week before GST, running at the 70% prime cost we aim for with the venues we look after:
- Sales before GST: $20,000
- Food and drink: $6,000
- Staff wages and super: $8,000
- Prime cost: $14,000, which is 70%
- Rent, power, insurance, software and the rest: $3,000
- Left over: $3,000
That $3,000 is not your pay. Income tax on the profit comes out of it, and so do the slow weeks, the coffee machine service and the loan repayment that never shows on a P&L.
Let prime cost drift to 75% and the same week leaves $2,000. So we’d set the fixed amount well under a normal week, say $1,500 here, and leave the rest in the business until a full quarter tells you what you can afford. If your wage cost leaves out the hours you work for nothing, the numbers will look better than they are.
Sole trader: your pay is drawings, and you’re taxed on the profit
As a sole trader you can’t pay yourself a wage. Pay yourself a “wage” anyway and the ATO treats it as a distribution of profit. Same for partners in a partnership.
What you take out is drawings. Nobody withholds tax from them. The ATO expects you to cover your tax through PAYG instalments instead.
You’re taxed on the business profit, not on what you transferred. The ATO’s own example has a sole trader moving $1,500 a month to her personal account, and all the business income still goes on her return. Take $1,500 a week from a venue making $3,000 and you still owe tax on $3,000.
The ATO puts you into PAYG instalments automatically, with payments usually every 3 months, once three things line up: your latest return shows instalment income of $4,000 or more, your notice of assessment shows tax payable of $1,000 or more, and your estimated tax is $500 or more. Because that test runs off your last return, if you’re new to business you may not be in yet. The ATO suggests new businesses join voluntarily, and we agree. Otherwise a whole year’s tax lands as one bill after your first return.
Company: put yourself on the payroll
A company is its own legal entity, so it can employ you and pay you a wage like anyone else on the roster. That wage goes through PAYG withholding and Single Touch Payroll, like any staff member’s. When the owner in the ATO’s example moves from sole trader to company, her tax agent helps her company meet its super guarantee obligations as well.
Super guarantee is 12%, as it has been since 1 July 2025. On a $1,500 weekly wage:
- Wage: $1,500, with your tax withheld out of it
- Super: $180
- Cost to the company: $1,680 a week
Under payday super that $180 goes out with each pay run. Your $1,680 is a wage cost of the company, so on the week above it leaves $1,320 before company tax, not $3,000. Anything left after company tax can come out later as dividends, and the company can’t deduct those.
Keep your private bills off the company
If the company pays your private bills, the ATO can treat it as a Division 7A deemed dividend. To stop that, pay it back in full or put it on a complying loan before the company’s tax return is due or lodged, whichever comes first. Complying means a written agreement signed and dated by both sides, interest at least at the benchmark interest rate, and a maximum term of 7 years (or 25 in some cases where it’s secured by a registered mortgage over real property). After that you make a minimum repayment every year.
In a trust, the trustee decides who gets the income. Get that wrong under the deed and it can be taxed at the highest marginal rate. If your venue runs through a trust, talk to your accountant about the trustee resolution early.
When we take over a file, one thing we find is ATO debt that was parked and forgotten about. Moving the ATO’s share out every week is how you stop adding to it.
What we would do
- Work out what a normal week leaves.
- Move the ATO’s share to its own account every week.
- Pick a fixed weekly amount well under what a normal week leaves, and pay it on pay run day.
- Sole trader: join PAYG instalments in year one. Company: put yourself on the payroll, with super.
- Keep private spending off the business account.
- Look at it again every quarter, when the BAS is done.
If we do your books, the weekly report shows what the week left and a BAS put-aside figure, so you know what’s yours before you take it. Tax returns are part of our Foundation package (what each package covers, our hospitality accounting).