If you have started your own business, you might be wondering how to pay yourself.

Do I need to set up payroll? Am I allowed to just take money out of my business profits? What about claiming it on my taxes?

When you are a sole proprietor (not incorporated), you don’t have to do anything fancy. You are free to take out as much or as little money out of your business as you like.

Why? Because, in the eyes of CRA, you and your business are one. Each year, CRA will calculate taxes on your net income (income minus expenses). This is done on your personal tax return under your name, so that profit after taxes belongs to you.

Pricing products and services can be tricky—and there are several methods of doing it. They all involve basic principles: knowing your customer, knowing where the market is headed, knowing your competitors, etc.

Another common denominator in whatever pricing method you choose is knowing your costs.

There’s a question that comes up often:

“Do I need a separate business bank account/credit card?”

The short answer is NO, you aren’t required to keep a separate bank account/credit card if you are a sole proprietor (not incorporated). Without getting too technical, in the eyes of CRA, you and your business are one--so there is no need to keep finances separate.