What salaries are startup founders allowed to pay themselves?

[Startup Questions]

This is a question asked by an anonymous member at our most recent event in London.

[James]

In the UK, startup founders can set their own salaries, but there are several considerations to keep in mind:

• Reasonableness: Salaries should be reasonable and justifiable based on the company's financial status and industry standards.
• Company's Financial Health: Ensure the salary does not jeopardise the company's cash flow and growth potential.
• Investor Agreements: Adhere to any salary restrictions or guidelines set by investors or funding agreements.
• Minimum Wage Compliance: At least meet the national minimum wage requirements.
• Tax Implications: Be mindful of personal and corporate tax obligations.

Of course, check with your company accountant - but as a rule, these are the guidelines. I'm not an accountant, but have experience in the industry - please seek your accountant's guidance.