Business Practices

What is an owner’s draw?

Also sometimes simply called a “draw,” this is money that is taken out of your business directly and is not taxed via payroll.

Draws are often taken by owners of sole props, partnerships, or LLCs, as the owner may not be eligible to be on payroll.

Remember, cash and assets you have taken out of your business as a draw are still most likely subject to taxes on a personal level. Check out our article on self-employment taxes to learn more about what you may owe.

owner's draw

This article provides general information and shouldn’t be construed as tax, benefits, legal, or HR advice. Rules and regulations may change over time and may vary by location. So, please consult an appropriately certified expert (such as a lawyer, CPA, tax advisor, licensed broker, or HR expert) for advice specific to your circumstances.