How does a Sole Trader get paid?

How does a Sole Trader get paid?

A Sole Trader you:

• do not get ‘paid’ as such – rather, a Sole Trader can extract profits from the business (profits being sales less expense and tax).
• don’t have to extract all profits from your business – you can choose to reinvest it or keep it as ‘working capital’ i.e. money for your till.
• are taxed on your all your profits regardless of whether or not you actually withdrew cash from your business bank account for personal use.

So to pay yourself as a Sole Trader all you really need to do is withdraw cash (called ‘drawings’) from your business bank account.