How Company Directors Can Take Money Out of Their Business — The Smart Way

If you’re a company director in Byron Bay or the Northern Rivers, chances are you’ve asked yourself at some point:

“What’s the best way to pay myself?”

It’s one of the most common questions we hear from established business owners — and the answer is never a simple one-size-fits-all. The right approach depends on your company structure, profitability, cash flow, and personal goals.

To give you clarity, here are five common ways directors can take money out of their business — and what you should know about each.

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1. Director’s Salary (Wages)

Paying yourself a salary through payroll is the most straightforward option.

• Provides regular, predictable income for personal budgeting.

• Requires PAYG withholding and superannuation contributions.

• Helps you contribute to super and maintain employee entitlements.

Many directors choose a base salary for stability, then use other methods (like dividends) for extra income.

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2. Dividends

Dividends are payments made to shareholders from company profits after tax.

• Can be a tax-efficient way to take extra money out of the business.

• Often come with franking credits, which can offset your personal tax.

• Requires careful timing to ensure the company has sufficient retained profits.

For some owners, a combination of modest salary + dividends works well.

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3. Director’s Loan Account

This is essentially borrowing money from your company.

• Governed by Division 7A rules — which set strict conditions on repayment and interest.

• Can be useful for short-term needs, but risky if not managed properly.

• Failure to comply can lead to the ATO treating the loan as unfranked dividends (and taxing you accordingly).

If you go this route, it’s essential to have a formal loan agreement in place.

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4. Reimbursements

If you’ve paid for a legitimate business expense with personal funds, the company can reimburse you.

• Must be for genuine business costs — like travel, subscriptions, or supplies.

• Keep receipts and documentation to support the reimbursement.

• This isn’t income — it’s simply paying you back for costs you’ve already covered.

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5. Superannuation Contributions

Paying money into your super fund can be a tax-effective way to extract value from your business.

• Employer contributions (from the company) are tax-deductible for the business.

• Can also make personal concessional contributions, within annual limits.

• Helps reduce taxable income while building long-term wealth.

Super might not help with short-term cash needs, but it’s a smart move for future planning.

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Final Thoughts

How you take money out of your business can have a big impact on your personal tax bill, your company’s cash flow, and your long-term wealth.

We put this guide together because it’s a question we hear from Byron Bay and Northern Rivers business owners all the time.

If we haven’t met yet, consider this a wave hello — and a little value from us to you.