No salary, but owner's draws
The owner of a single-member LLC is not its employee. The LLC does not run payroll for you and there is no US salary. You pay yourself by transferring money from the company's account to your own: an owner's draw, also called a distribution.
There is no fixed amount or schedule. You can take money out monthly, quarterly or whenever there is enough in the account, as long as the company can still pay its own bills.
How the money moves
From the LLC's US bank account to your personal account at home, by international wire or through a service such as Wise, which is often cheaper for currency conversion. Use a description such as 'owner distribution' so the purpose is clear on both statements.
What to record
For a foreign-owned single-member LLC, money moving between you and the company is exactly what Form 5472 reports. Keep a simple record of every transfer:
- Money you put in: is it capital, or a loan to the company? Write it down at the time.
- Money you take out: date, amount and that it is a distribution.
- Company costs you paid personally: keep the receipts and repay yourself from the company account, labelled as a reimbursement.
- Loans in either direction: a short written agreement with amount and terms.
At year-end these lines add up to the figures on Form 5472. Bookkeeping software such as CORA tracks them during the year so the form is quick to prepare.
Mistakes to avoid
- Paying personal costs with the company card. It blurs the line between you and the company, which is the line that gives you limited liability.
- Leaving transfers unexplained. A year later nobody remembers whether 5,000 dollars was a loan or a distribution.
- Taking out money the company owes to others, such as customer prepayments or sales tax.
Tax on what you take out
For a foreign owner whose LLC has no US-taxable income, a distribution is normally not taxed again in the US. Your home country usually taxes the LLC's profit or your distributions as your income; how depends on the country. With two or more owners the LLC is a partnership: distributions follow the operating agreement and each member receives a Schedule K-1.
Frequently asked
Can my US LLC pay me a salary?
Not as owner of a single-member LLC: you are not its employee. You take owner's draws instead.
Is there US withholding tax on my draws?
Not when the LLC has no US-taxable income and is disregarded for US tax. With US-taxable income or several members, different rules apply; ask a tax adviser.
This guide is general information, not legal or tax advice. Rules and fees change; check your own situation with a professional.