Paying Your Own salary

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Calculating your salary

When you begin your social enterprise, you have to consider your own wellbeing and take a salary you feel is sufficient enough so that personal financial problems do not affect the running of your social enterprise.

  • Choose a salary that allows you to live
  • At a level that will not affect the social enterprises cash flow or viability
  • Standard numeric method calculation for calculating your salary is using basic accounting for the month

Income for September 2014

Outgoings for September 2014

Award from x funder (£20,000/12) = £1666

Utilities +Office rent =£1100

Award from x organisation ( £5000/12) = £416

Supplies = £300

Sales = £3000

Travel - £600

Total Income = £5082

Total Outgoings = £2000

Balance = £5082-2000= £3082

If you took a salary of £1300 pcm that would leave a profit of £1782 = equates to a salary of £20000 per annum.

Deductions

Standard deductions would apply such as National Insurance Contributions and PAYE.

Salary and the social enterprise sector

When drawing a salary do not expect a bumper payday as this reflects badly on your new start social enterprise. If you hamper your social enterprise ability to deliver its social aims through an excessive salary this will not please your peers\funder’s and could harm your ability to receive funding or conduct business.

Other factors

When you calculate your salary remember to consider the effects on your current financial situation.  By becoming self employed it may affect some entitlements that you could be claiming.