It is always a struggle to get small business owners to put themselves on their own payroll. They miserly withdraw funds to live and keep as much money in the business as possible and cover their employee’s payroll faithfully.
But now we live in a situation where that plan has hindered them immensely, the PPP would have helped the business owner cover their pay as well as their employees if they were on payroll in earnest.
I have been in discussion with one client who is taking this lesson to heart and is determined to get themselves on payroll for more than a token amount moving forward.
I have another client, where I need to talk to them about applying for the PPP. He only has himself on payroll but has suffered from a devastatingly poor 1st quarter. They are late in covering the payroll taxes.
The PPP has the opportunity to allow his business to recover and continue into the future.
An owner of an S-Corp is supposed to take a reasonable salary, unfortunately the business cash flow does not make this an easy task. But it should be a priority of the business owner. I have owners who insist on their paycheck, even if the business needs to borrow the funds to accomplish the task.
I believe this current situation will make all businesses reevaluate their payroll and priorities.