Welcome back, everybody. My name is Mark Kohler, and we're here to talk about payroll for your S. Corporation.

How much should it be? How do I do it? Why am I doing this?

Folks, I'm going to answer all those questions and more.

Now, I am a licensed, certified public accountant, attorney, best-selling author, an owner of multiple tax and legal businesses,

and I have been teaching this content for over 20 years to business owners all over the country.

You're in the right place. Now, have you been confused of how much payroll you should take in your S corporation? It can be because you talk to one advisor, they say one thing, you talk to your lawyer, they say another, you talk to your friend and they're doing something completely different. It can be very confusing. And it can make us nervous because we're like, man, I don't want to get audited for taking too little salary, but I don't want to take too much and pay more in tax. Well, stress no longer. Today you're going to get the answer on how to best choose the proper payroll for your S corporation. I have developed what's called the Kohler Payroll Matrix, taking the country by storm. Super exciting. And what it does is it gives you a rule of thumb of what your payroll should be based on the profit you take out of your business. Okay, so let's go to the whiteboard. And if you've watched any of my videos before, you're going to be familiar with the trifecta because it puts it in perspective of all of your other

business entities and operations. In the trifecta, the foundation is your revocable living trust.

It's also kind of where I'd like all your money to go, called your $1040 tax return.

We're then going to split your life in half, and over here we're going to have operations and assets.

Now, over here is where you might have an LLC

that owns your rental properties. That's great. And it's going to be owned by your trust. Trust

owns your LLC. LLC owns the rentals. And you're going to have your own checkbook over here for that

type of stuff. Passive income. Passive. We are never going to put an S corporation over here. On this side,

we might have an LLC that we graduate and transition to an S corp. I have another video on when,

where, why, and how to use an S corporation. It'll be down in the description. Please go back and

watch it if you haven't already done so. But in this S corp is where we're going peg our W-2, or this salary, and then all the rest of the profit comes down here into our 1040. And our S-Corp

is owned also by our trust. This is the trifecta, an S-Corp, an LLC, split in half,

owned by my trust. That is the foundation of every wealthy client and I have and how they build more and more wealth. Boom, but a bang. Now in the S-Corp, you're going to have gross revenue or sales. You're going to have expenses and then you're going to have your profit. Okay, so let's put some numbers to this. Let's say you're going to make 150 grand in sales and I'll use some numbers greater and smaller than this

in a moment, and you have 50 grand in expenses. Your profit would be $100,000. Again, some of you

may already remember, if you take that 100 grand and run it through just a plain old LLC or sole

proprietorship, you're going to pay 15 grand and self-employment tax if you're not an S-Corp. We don't want to do

that. We want to take salary of a certain amount and then let everything else push through on a K-1. That's the profit. So you're going to get a W-2 and a K-1. Well, how much should the salary be? Right? That's the quandary. Now, to answer that question, we have to look at what is your profit? And I want to take a percentage of that profit and allocate it to salary. Now, let's digress for a moment. There's a lot of advisors out there that are probably already in your ear, or if you've searched out on the web, they're going to say, reasonable comp is based on, you know, exactly what you're doing compared to someone else across town. And are you old or young? How much is your profit

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