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Paying yourself: what counts and what doesn't

November 11, 2026 · 5-minute read

It feels like an expense when money leaves the business for your own pocket. Usually, it isn't. How it works depends on how your business is set up.

If you're self-employed

When you're a sole proprietor, the business and you are the same person for tax. You pay tax on the business's profit, not on what you take out. So the money you move to your personal account (accountants call it a draw) isn't an expense, and it doesn't lower your tax.

In PeaceBooks, record it as Paid myself. It comes out of your bank balance, but your profit stays the same.

If you have a company

A corporation is its own person for tax, so paying yourself is a real choice. The usual ways are:

• A wage. Paid through payroll, like any employee, with CPP and income tax taken off, and a T4 at year-end. The wage is an expense for the company.
• Dividends. A share of the profit after the company pays its tax. Not an expense for the company.
• Paying back what the company owes you. If you paid company bills from your own pocket, or lent it money, the company can pay that back without tax.

The right mix depends on your income, your family and your plans. That's a conversation for your accountant, once a year.

Keep track of what the company owes you

Paid for fuel with your own card? Drove your own truck for work? In PeaceBooks, choose Paid with my own money or log the mileage, and Home shows The company owes you, with the history behind it. When the company pays you back, record it, and the balance goes down.

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