How Health and Wellness Entrepreneurs Can Determine Their Pay Structure

If you’re a health and wellness business owner—whether you’re a chiropractor, physical therapist, yoga instructor, gym owner, or any other small business owner—one of the most common questions that comes up is:
How do I pay myself?

The truth is, there’s no one-size-fits-all answer.
Your pay structure depends on a few key things, but the most important is how your business is legally set up. Whether you’re a sole proprietor, an S corporation, a partnership, or a C corporation, each structure has its own rules. And if you want to keep your business financially healthy, it’s important to understand those rules when deciding how to pay yourself.

Know Your Business Structure

Sole Proprietors and Single-Member LLCs

If you’re a sole proprietor or own a single-member LLC, paying yourself is fairly simple. You’re allowed to take money out of the business as needed, as long as there’s cash available.

But just because you can take money at any time doesn’t mean you should.
It’s important to make sure you’re not draining your business of the cash it needs to operate and grow.

S Corporations

Things are a little more structured if your business is taxed as an S corporation.

As an S corp owner, you’re considered both an owner and an employee. That means you’re required to pay yourself a reasonable salary through payroll. This salary is reported on a W-2 and is subject to payroll taxes.

After you’ve paid yourself a reasonable wage, you can take additional profits out of the business as distributions. Distributions are not subject to self-employment tax, but they can affect your shareholder basis—so it’s important to stay on top of the details.

Common Mistakes to Avoid

Skipping Legal Requirements

One of the most common mistakes I see is S corp owners forgetting (or avoiding) the requirement to pay themselves a salary. This is a legal obligation, and ignoring it can create major tax issues down the road.

Poor Cash Flow Management

When business and personal finances are mixed, it’s hard to know what’s really going on.
This often leads to pulling too much money from the business, leaving it unable to cover bills, taxes, or growth opportunities.

Taking Too Much from Profit

Not knowing how much of your net profit you're taking out can hurt your business in the long run. If you’re always drawing out everything that’s left over, you’ll struggle to reinvest in marketing, tools, or team support when you need it most.

Tips for Paying Yourself the Right Way

Understand Your Entity Type

The first step is knowing how your business is set up and what’s legally required when it comes to compensation. If you’re unsure, it’s worth talking to a CPA or accountant who understands small business taxes.

Create a Realistic Budget

A budget isn’t just about expenses—it helps you set clear expectations for how much you can and should take from the business. It also helps prevent surprises and protects your cash flow.

Keep Business and Personal Finances Separate

Use a separate business bank account and credit card. Not only does this simplify your bookkeeping, it also helps you make better decisions and avoid using business funds for personal needs without realizing it.

Set Aside Money for Taxes

No matter your structure, taxes are a reality.
Plan ahead by setting aside a percentage of your income—typically around 25 to 30 percent—so you’re not caught off guard when tax season rolls around.

Reinvest in Your Business

It’s tempting to take out as much as you can, especially when your business is doing well. But consistent reinvestment—in your tools, systems, marketing, or team—will help you grow sustainably and avoid burnout.

Final Thoughts

As a health and wellness entrepreneur, deciding how to pay yourself isn’t just about what you want to earn—it’s about finding the right balance between supporting your personal finances and keeping your business strong.

When you understand your business structure, stick to a budget, and plan ahead for taxes and expenses, paying yourself becomes part of a healthy financial routine—not a source of stress.

Your business is more than a paycheck.
It’s a reflection of your purpose and passion.
Take care of it, and it will take care of you.