Our new company, (2 of us are owner/directors and one staff), has been going for 4 months now. We’re a PTY LTD company. For the first 3 months we paid our staff wages & super etc whilst we worked for “free” to build a buffer. For the last month, now there’s a buffer in place, we have become staff of our own company and have started paying ourselves a salary too. It only struck me today that the main reason there is now a buffer is the three months’ worth of work we did for “free” resulted in the invoices creating the buffer, (profit), but as we did not draw a wage we will ultimately pay company tax on that whole amount without the “expense” or our wages to offset against it. The original idea was that we would employ ourselves when we were sustainable to do so, then after year 1 we’d take a dividend from a portion of any profit left with the balance left in the company bank account as a buffer to smooth out the following year. Am I right in thinking we may have shot ourselves in the foot for not drawing a wage from day one whilst creating the income? Can we back-pay ourselves for the hours/work done in generating that profit or are we too late now that we have already paid ourselves a month’s wage, (company started beginning of June, we became staff of it beginning of September). Is it simply a case of changing our start date in Xero back to the start of the company, (or Say July 1st to keep it within this year), then running unscheduled pay runs to “catch up”? If so, is there even merit in this or would some kind of Directors Fee for those months be more suitable, (or even possible)? Can’t believe I didn’t think of it before, but it only hit me today that basically 2 of us, working our buts off 70 hours a week for 3 months for no pay to generate a decent starting buffer will get hammered with company tax on that whole buffer, (less operating costs), as we have not expensed our hours in creating it in the first place. Hope that makes sense? It’s not like those months were R&D or set-up months, we are structural draftspeople, to generate that profit we have both been producing something, (drawings), that generates an invoice for the service to the client. Very basically, each hour we “work” generates an hours sum of money which, for those first three months, now has no labour cost associated it with it. Cheers.