The short answer
Learn how consulting and management income can be used as an alternative way to extract earnings from your business and stream to beneficiaries.
How Consulting Income Can Be Used to Pay Yourself From Your Business
Beyond traditional salary or dividends, consulting income is another effective way to take earnings out of your business. In many setups, this involves drawing management income alongside employee wages, providing flexibility in how funds are distributed.
Streaming consulting income through a separate entity can also open up additional planning opportunities. This structure allows income to be directed in a way that supports both the business and your broader financial goals.
For business owners with multiple beneficiaries, this approach can be particularly useful. It creates another pathway to distribute income while maintaining a clean and intentional structure across your overall financial setup.
What’s the main risk with this approach?
Relying on consulting income can hide whether the core business is profitable on its own. Track the two income streams separately, so you know when the business can pay you without the consulting work propping it up.
Key takeaways
Management or consulting income is a third way to take earnings out, alongside wages and dividends.
Paying it to a separate entity can create planning options for beneficiaries.
It must reflect genuine services at a commercial rate and be documented.
Get advice before setting it up, as tax rules apply.
Read next: how to pay yourself as a business owner, structuring income for different life stages, or talk to our business accountants.
Oz calls accounting "the great art", and his clients would agree. A CPA member and Xero specialist, he joined Elephant to provide a more holistic service that covers every base of building wealth. He believes long-term relationships are the only way to get clients real results. When he's not at his desk, he's at the gym, on his bike, or fishing - ideally all three.
