For how long have you been paying yourself the same wages from your company? If it's been a while, you should ask yourself some questions. Has your personal financial situation changed since you've set up your wages? Has your company's profitability changed? Has your company's cashflow changed? Does the company have enough cashflow to operate and grow? Is the current wages still tax effective? And, do you have a superannuation strategy and are the superannuation contributions from your company in line with them?

In personal life and business, things change all the time, so, if you have reflected on these questions and see that some things have changed, it means that it is probably time to also change your wages. And it doesn't have to be a complete overhaul.

But, in my experience, I've seen really two extremes, and I'm sure you're not in these extremes. You may be in the middle. But I've seen business owners that pay themselves too little and others that pay themselves too high in wages.

Those that pay themselves too little normally they would have set their wages when the company was just established or before growing. And, of course, its great to leave cash in the company if the company is growing, but at some point this business owner must consider withdrawing extra wages from the company. And of course there's other ways, there's also dividends that can be considered but that's not the purpose of this video.

On the other hand, I've seen business owners taking out too much wages and this happens if the company is established and the business owner has need of personal financial commitments, so it does need more cash, but it becomes a problem when the company cannot sustain the wages and it gets behind with other payments of Pay As You Go Tax or GST. So, in those cases, business owners could consider reducing their wages and, of course, they can look at other costs as well. But making sure that they can only withdraw that much wages only if the company can afford it, essentially.

And you are not going to be in those two extremes. Probably you are going to be in the middle. But even then, there is still scope for making some tweaks. And it's always good to go through this with your accountant. They will be able to really make more accurate calculations for the tax as well. Because, of course, your wages are tax deductible for the company, but you have to pay income tax in your personal name. Your marginal tax rate may be higher than the company's income tax rate, so your accountant is able to help you to balance that off.

Also, if you have a strategy where you want to make additional superannuation contributions in your fund then its also good to check in with your accountant because of course there are tax benefits because the superannuation tax rates are set at 15 percent now, and they are lower than the company tax rate, but that really depends on your situation as well because, of course, there is a contribution cap so you cannot go over a certain amount, and there is also an income threshold as well and there is more tax to pay if your income is over a certain level, and there's paperwork to do as well. So always check in with your accountant on the best way to do that. There may be some paperwork. Always check with your accountant on the best way to go about it.

Make sure that your wages are not a set and forget. Make sure that you review them at least every year with your accountant.