If you are thinking about starting an ATM business, or any business for that matter, you might be wondering how do you pay yourself as a business owner. When you start your own business, it’s easy to focus on customers, products, and growth and forget one big question: how do you actually pay yourself?
Whether you’re running a one-person freelance operation or managing a small company with employees, paying yourself the right way is crucial for both your finances and your business’s long-term health. Especially in the ATM industry, how do you keep your revenue separate from your business expenses? And how do you calculate your profit?
In this article, we’ll break down your options and how to do it correctly.
How Do You Pay Yourself as a Business Owner: By Business Structure
How you pay yourself depends first and foremost on how your business is legally set up. The IRS treats each structure differently when it comes to income, taxes, and distributions.
Sole Proprietorship
If you’re a sole proprietor, your business and personal finances are legally the same. You don’t get a “paycheck”. Instead, you simply draw money from your profits. This is called an owner’s draw and is the most common route for independent ATM deployers (IADs).
With this structure, you’ll pay self-employment taxes (Social Security and Medicare) on your net income so it’s smart to set aside about 25–30% of your profits for taxes.
Partnership
Partners usually take owner’s draws as well based on their share of the partnership’s profits. Therefore, you’ll also pay self-employment taxes on your share. If you are entering into a partnership, make sure your partnership agreement clearly outlines how and when draws are made.
Limited Liability Company (LLC)
How you pay yourself as an LLC depends on whether you’re a single-member or multi-member LLC and whether you elect to be taxed as an S corporation.
In a single-member LLC, you take an owner’s draw, similar to a sole proprietor. In a multi-member LLC, each member takes draws according to ownership percentage.
LLCs can also be taxed as an S corporation. In this scenario, you can pay yourself a reasonable salary through payroll and take dividends/distributions from profits often with potential tax savings.
Corporation (C Corp or S Corp)
If you’ve incorporated, you’re both an owner and an employee. In a C Corporation, you receive a salary as an employee; dividends may be taxed separately. In an S Corporation, you must pay yourself a “reasonable salary” and can also take dividends.
When determining which structure to use when you legally set up your business, consider these distinctions and IRS guidelines. For more information about how to structure an ATM business, check out our article Do You Need an LLC for ATM Business?
Salary vs. Owner’s Draw
There are two terms for business owners paying themselves: salary and owner’s draw. If you’re taking a salary (S Corps, C Corps, LLCs taxed as S Corps), you’ll set up payroll and withhold taxes just like you would for an employee. An owner’s draw is when you take money out of your company’s account for personal use.
As an IAD (sole proprietors, partners, LLCs), you will probably take a draw—it’s a simple way to pay yourself. However, the funds are considered taxable income and are therefore subject to self-employment taxes. So, it’s more flexible than a salary, but it requires discipline to budget for taxes and business expenses.
How Much Should You Pay Yourself as a Business Owner?
There is no set number, percentage, formula or one-size-fits all answer to the question of how much you should pay yourself as a business owner. However, there are some guidelines you can use to help you gauge this:
First, make sure your personal needs are covered. Consider your minimum monthly take-home number for rent, bills, and other essentials.
Then, reinvest in your business. Avoid draining your profits early on. Leave enough cash to fund operations, market, or set aside for emergencies or upgrades.
It’s also a good idea to base your pay on business performance. If profits fluctuate, consider a lower base pay and quarterly bonuses when income is strong. (For S Corp owners, the IRS requires that your salary be “reasonable”—in line with what someone doing your job would earn.)
Since many IADs at least start their ATM businesses as side hustles, these guidelines may not necessarily apply. A regular or full-time job may be covering rent and regular bills. In that case, your profit from your ATM business simply goes into your pocket less the amount you want to reinvest in your business.
How Do You Pay Yourself as a Business Owner: Best Practices
Even if you’re the only person in your business, it’s important to separate your finances to keep things organized, clean, and compliant. Therefore, you should open a dedicated business bank account, use accounting software, automate transfers, and save for taxes.
A dedicated business bank account helps ensure that you don’t use business funds to pay for personal expenses and vice versa. As an IAD, you’ll want two business bank accounts: one from which to withdraw and settle the vault cash for the ATM and a second one into which surcharge revenue is deposited.
Accounting software like QuickBooks or Wave can help you to track payments and expenses. Don’t forget to allocate a percentage each quarter to taxes, maybe in a separate tax account.
These best practices simplify bookkeeping and make your business more professional.
How to Pay Yourself as an ATM Business Owner (IADs)
If you operate an ATM business—especially as an IAD—the same principles of paying yourself apply, but the cash flow and accounting setup look a little different.
Your income doesn’t come from invoices or client checks; it comes from surcharge fees. Because of that, how you pay yourself depends on how your business is structured and how you manage those cash flows.
Here is what paying yourself might look like as an IAD:
Separate Business and Personal Cash
Keeping business and personal cash separate is especially critical in an ATM business where literal cash is constantly moving. Maintain a dedicated business bank account for surcharge deposits and vault cash management.
Never take cash directly from the ATM for personal use because it complicates tracking and may raise red flags with processors or regulators. Instead, transfer your profits electronically into your personal account as your “pay.”
Determine What “Profit” Really Means
In the ATM world, “gross surcharge revenue” isn’t the same as profit. Before paying yourself, you must account for a few deductions. These might include processing/network fees, vault cash replenishment, split commissions with location owners, maintenance costs, insurance, internet/telecommunications, repairs, etc.
What’s left is your true net business income, and that’s where your pay comes from. Check out our article “Is an ATM Business Profitable: How Much ATM Business Owners Make” for more information about how to calculate ATM business profit.
Build a Predictable Payout System
ATM income can fluctuate with transaction volume, so consistency is key.
You can transfer a fixed amount to yourself each month as base pay, then add quarterly bonuses if profits exceed expectations. Use accounting software to track each ATM’s performance and your total net cash flow. And always leave enough in the business account to replenish vault cash and cover service costs.
Keep Tax and Regulatory Compliance in Mind
Because ATM businesses deal with cash and financial networks, your business draws more scrutiny from banks and regulators. To protect yourself, keep accurate digital records of every transaction and payout. You can do this through remote online monitoring of your machine activity. This service should be offered by the processing company you work with.
Pay self-employment or payroll taxes on your compensation depending on your structure. If your business has partners or investors, clearly document how profits and distributions are divided. If necessary, consult an accountant experienced with ATM operators. They’ll understand the nuances of reporting surcharge revenue and managing cash float.
How Do You Pay Yourself as a Business Owner: The Bottom Line
Treat your paycheck like any other business expense. The more intentional you are about how and when you pay yourself, the stronger and more sustainable your business will be.
For ATM owners, your business might run on quick access to cash, but your pay shouldn’t. Treat your ATM income like any other small business revenue—run it through your books, pay yourself strategically, and always keep tax and vault funds separate. The result is smoother operations, cleaner records, and sustainable profit for the long run.
Still have questions about how do you pay yourself as a business owner in the ATM industry? Don’t hesitate to contact us at ATMDepot before starting your own ATM business. There’s money to be made—we can help!