Last in line for your own pay packet?

Plenty of workshop owners pay their staff, their suppliers and the tax office before they pay themselves. Here’s why that habit costs more than you think and how to fix it.

Ask most workshop owners what they earn and you’ll often get a pause, then something like “whatever’s left at the end of the month”. The techs get paid, the parts suppliers get paid, the BAS gets paid and the owner takes what’s in the account after that.

It feels responsible. It’s your business, so you go last. But over time, that habit can hide how your business is really performing, put pressure on your household and make the business harder to sell when the time comes.

Two different returns

As an owner, you should be getting two separate returns from the business.

The first is a wage for the work you do. If you’re on the tools, writing quotes, ordering parts, chasing payments and managing staff, that’s a job. It has a market value, whether you own the place or not.

The second is profit, your return for owning the business and carrying the risk. That’s what’s left after every cost has been covered, including a proper wage for you.

When the two get blurred, the numbers stop telling the truth. A workshop that looks profitable on paper may only be breaking even once the owner’s labour is costed properly. If you weren’t there, someone would have to be paid to do your job.

Work out what your job is worth

Start by listing what you actually do in a typical week. For most owners it’s a mix of technical work, service advising, management and admin, often well beyond a standard 38 hour week.

Then ask a simple question. If you had to hire someone to do all of that, what would you have to pay them? Look at what workshop managers, senior techs or service managers are earning in your area. That figure, not what’s left over, is your starting point.

You may not be able to pay yourself that full amount straight away, and that’s fine. The point is to know the number, so you can see the gap and plan to close it.

Common traps

A few habits tend to keep owners underpaid.

Taking irregular drawings is one. Pulling money out when the account looks healthy makes it hard to know what you’re actually earning. It can also leave you short in leaner months.

Another is not building your wage into your labour rate. If your hourly rate only covers your staff, parts margins and overheads, you’re effectively working for free. Your own time needs to be in the pricing.

The third is mixing business and personal money. Depending on how your business is structured, money taken out of a company that isn’t paid as a wage or dividend can create tax complications. This is one to talk through with your accountant rather than guess.

Super is also worth checking. If you’re paid as an employee of your own company, super obligations may apply to you as well as your staff. Your accountant can confirm what applies to your structure.

Putting yourself on the payroll

Paying yourself properly usually comes down to a few practical steps.

First, set a regular amount and a regular pay day, the same as you would for a staff member. Even if it starts lower than your market wage, consistency makes it easier to plan at home and in the business.

Second, put your wage into your budget and cash flow forecast as a fixed cost. Once it’s there, every other decision, from pricing to hiring, is made with it in mind.

Third, review your labour rate. If paying yourself properly means the numbers don’t work, that’s important information. It may mean your rate is too low, your efficiency needs work or some jobs aren’t worth taking.

Fourth, keep profit separate. Once your wage is covered, profit can be reinvested in equipment, training or a buffer, or taken as a return. Either way, you’ll know what the business is genuinely making.

Finally, review it every year with your accountant. As the business grows, your wage should grow with it.

If paying yourself properly means the numbers don’t work, that’s important information.

Why it matters beyond your pay packet

Paying yourself properly isn’t just about what lands in your bank account. It gives you a true picture of how the business is performing. It makes it easier to step back from the tools one day, because the cost of replacing you is already built in. And if you ever decide to sell, a buyer will want to see a business that’s profitable after paying someone to run it. A workshop that only works because the owner is underpaid is worth less than it looks.

It also matters at home. Long hours with no reliable pay packet is a fast track to burnout. Your family feels it too.

You’d never ask a tech to work for whatever was left over at the end of the month. It’s worth holding yourself to the same standard.

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