You're paying everyone else. Are you paying yourself a proper wage?

By Dermott Berkhout, Senior Accountant - blueprint4

Most business owners I sit down with know exactly what they're paying everyone else.

They know their payroll costs down to the dollar. They know award rates, super obligations, overtime, WorkCover, leave balances, and what that new apprentice or admin hire is costing the business every week.

But when I ask what they're paying themselves, the answer is often far less clear. For a lot of small business owners, their own income becomes whatever is left over after everyone else gets paid.

Sometimes it's inconsistent. Sometimes it's below market value for the role they're actually performing. Sometimes it's nothing at all for long stretches while they try to “push through” and grow the business. And while that might feel normal in the early stages of business ownership, the problem is that many businesses never move past it.

At some point, underpaying / not paying yourself goes from being a necessary sacrifice to a critical issue for your family's finances.

The hidden issue behind founder underpayment

Most business owners don't intentionally undervalue themselves. In fact, it's often the opposite. They care deeply about their staff, their customers and the future of the business, so they put themselves last.

If the business needs cash flow? They'll skip their own pay. 

A team member needs time off? They'll absorb the pressure themselves. 

Margins are tight? They'll work nights and weekends instead of hiring support.

The problem is that over time, this creates a business model that only works because the owner is over-functioning inside it. That's not sustainable growth - it’s dependency.

If your business relies on you working unpaid overtime, carrying multiple roles, and accepting below-market remuneration indefinitely, then the business may not actually be as profitable as it appears on paper.

That's a confronting idea for a lot of business owners, but it's an important one. Because if the business can't afford to pay you properly for the work you're doing, how will it eventually afford:

• A manager?

• A second-in-command?

• Maternity or paternity leave?

• Reduced hours?

• Succession?

• An eventual exit?

These things are all connected.

What a sustainable owner's wage actually looks like

This is where a lot of the “pay yourself first” advice online misses the point. Paying yourself a fair wage isn't about pulling money out of the business recklessly or prioritising lifestyle over stability. It's about understanding what the business genuinely needs to sustain itself long-term, including the person leading it.

Ideally, a sustainable owner's wage should reflect:

• Market rate for the specific role that you're performing

• The profitability of the business

• The reliance of the business on your presence and expertise

In early-stage businesses, founder remuneration is often lower while the business establishes itself. That's realistic. But over time, there should be a pathway toward paying yourself market value for the role that you perform within the business, whether that's operations, sales, management, technical delivery, or leadership.

Because your wage is not separate from the health of the business. It is part of the business model.

Why this matters more than many owners realise

I work with a lot of business owners who tell me they want more freedom, better balance, or eventually the ability to step back from the business. But those outcomes don't usually start with systems or hiring. They start with understanding whether the business can financially support the owner's role without relying on personal sacrifice forever.

When founders consistently underpay themselves, a few things tend to happen:

• Burnout increases

• Resentment builds

• Hiring gets delayed

• Delegation feels impossible

• Business value becomes tied entirely to the owner

Eventually, many owners realise that they've built themselves a job they can't leave. The irony is in the fact that properly valuing your own role is often what creates the ability to grow beyond that, because once you understand the true cost of running the business properly, you can start making clearer decisions around pricing, staffing, efficiency and growth.

A useful question to ask yourself

If you disappeared from the business tomorrow and had to hire someone to replace everything you currently do, what would it cost?

For many business owners, the answer is significantly more than they're currently paying themselves. That's usually a sign the business structure needs attention, not the owner.

A good time to revisit this

As we move through the new financial year, many business owners are reviewing budgets, staffing and growth plans for the months ahead.

This is a good opportunity to step back and ask:

• Is my remuneration sustainable?

• Is this business structured to support growth without relying entirely on me?

• Am I building a business, or am I building a role I can never leave?

  
  

These aren't always easy conversations, but they're important ones, because long-term business success isn't just about revenue growth, it's about building something sustainable enough to support the people inside it, including you.

That's what we're here for. Please reach out to book a free initial consultation to see how we can work together on a blueprint for your future.

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Dermott Berkhout is a Senior Accountant at blueprint4, a small to medium business accounting and advisory firm based in Warragul. blueprint4 works with business owners across Gippsland and South East Melbourne.