Free calculator for home care owners
How much can a home care agency owner pay themselves?
A home care owner runs on thin margins and weekly payroll. What you can take depends on profit after overtime, and on how much cash waits with slow payers.
The starting numbers are an example for a home care agency. Replace them with yours.
Three rules for paying yourself from a home care agency
- Base steady pay on average profit, after overtime.
- Take extra draws only when slow payers are current.
- Personal taxes come out of what you take. Ask your accountant how much to set aside.
What changes the answer for a home care agency
Home care profit is thin and payroll is weekly. A slow insurance payer can take a month of profit out of the bank for a while. Base your pay on profit after overtime, and check slow payers before any draw.
The worked example
In the example, the business keeps $74,000. That covers $52,000 for two payrolls, $10,000 of monthly bills and $12,000 due soon. Steady pay comes to $7,200 a month. Anything above $74,000 in the bank is spare.
A common question
Why does my home care agency run short of cash when it is profitable?
Caregivers are paid weekly, and some payers take 30 to 60 days. The more hours you bill to slow payers, the more cash you carry. Split private pay from insurance in your forecast.
Know what is safe to take, every week
One Page CFO shows the cash above your safe line every Monday, from your QuickBooks, checked by a CFO.