Owner's Draw

An owner’s draw is money a business owner takes from the business for personal use rather than receiving it as employee wages.

Owner’s draws are common in certain pass-through business structures and generally reduce the owner’s equity in the business. A draw is not the same as payroll and does not by itself determine the owner’s tax liability. The appropriate way to pay an owner depends on the business structure and tax treatment, so owners should coordinate with a qualified tax or accounting professional.