Free calculator for insurance agency owners
How much can an insurance agency owner pay themselves?
Agency revenue renews each year, which makes steady pay easier to plan. The trap is premium trust money. Pay yourself from commission profit in the operating account only.
The starting numbers are an example for an insurance agency. Replace them with yours.
Three rules for paying yourself from an insurance agency
- Base steady pay on commission profit across the year.
- Never count trust account money as cash you can take.
- Personal taxes come out of what you take. Ask your accountant how much to set aside.
What changes the answer for an insurance agency
Contingency commissions from carriers can land as one large check. They depend on loss results and may not repeat. Treat them as a one-time bonus and keep steady pay where it was.
The worked example
In the example, the business keeps $53,000. That covers $36,000 for two payrolls, $9,000 of monthly bills and $8,000 due soon. Steady pay comes to $9,600 a month. Anything above $53,000 in the bank is spare.
A common question
Can an agency owner use premium trust money?
No. Premiums held in trust belong to the carriers until they are paid over, and most states regulate that account. Forecast and take pay from the operating account only.
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.