Employee vs Business Owner – Which Makes More Money ?
Employee vs Business Owner – Which Makes More Money ? – Add me on Instagram: GPStephan
GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER:
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: – $100 OFF WITH CODE 100OFF
My ENTIRE Camera and Recording Equipment:
For business inquiries, you can reach me at grahamstephanbusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.
That’s also not how self employment taxes are calculated. Yes you get to deduct your expenses, but you are also subject to self employment taxes. So assuming their numbers, while the employee paid 20% taxes the business owner would be closer to the 30% range.
There is more opportunity to manipulate your income, but there are additional taxes and fees that come along with that.
People don’t understand the difference between gross income of the business (sales total) and the actual income of the individual, which for a self-employed person is the net profit of the business.
@@tonymouannes That’s not how it works in Sweden at least as someone self-employed using an AB. If you take out a salary, then first you pay 31% employer tax, and then you pay around 32% employee tax on the resulting amount, so for example $100 * 0,69 * 0,68 = $46,92.
Alternatively, instead of a salary you can take out the money via dividends. Then it would be 20% company tax, and then 20% dividend tax on that, so for example $100 * 0,8 * 0,8 = $64.
So to say net profit of the business is the income of the individual is not exactly accurate 😀
Lol that means business only actually made 20 bucks…. If you do shady stuff and illegally push your own personal expenses through business yea you may get more money but you just committed a tax fraud.
Yea, but you’re assuming the business will stay and earn the same as the employee. And that’s not how it works usually. Usually the business side will go up, sometimes down hence why Graham’s saying it’s not guaranteed, but in this case we’re assuming part of the $80 is used to grow the business and earn more $, whereas the employee is spending the $64 entirely on, well, expenses.
Oh and it may sound like it but I’m not disagreeing on the point of how much they made, since the business guy technically only ‘made’ $16, but I’m just pointing out that the business side has potential for larger and faster growth than the employee will have
@@DeltaBunno one thinks of it as a business because no one in the comments are buisness owners
Is easy to do rax fraud
It’s not expenses, it’s business expenses. Sure you can put some personal expenses like meals under business expense. But you can’t put your house rent, utility bill, or purchase of a jewelry as business expense.
You most definitely cannot put personal meals as a business expense
You could actually do a business from home deduction and you can write off the % of square footage your office from your home. Say you use 15% of space, then you can write off 15% of rent, utilities, and insurance. So it does help, but you’re right, you can’t write off everything.
This^ People in US or Canada should know this…… You deduct business expense… Not your personal life expense…..
You can
If your business has a space in your home that % of sq ft is tax deductible off your rent or mortgage. Utilities are looked at the same way, and phone bills. But you definitely can’t write off personal meals only ones during the work week/hours
Neither is guraneeted. You could lose your business or your job at any moment. I still choose being the business owner though.
Working and investing is the best path for most people. Starting a business is for the weirdos that can’t see themselves doing anything else
A business “making” $100 and having $80 of expenses is not “making” $100, is making $20. At some point you need to pay yourself. When you pay yourself, whatever you pay yourself will pay taxes.
Yeah that salary gets taxed as income. As the business owner you also have to include Medicare & SS which is typically like 30%.
It boggles my mind how people put down employees as if you don’t need employees to run a business. I just don’t get it🤦🏿♂️
You don’t need employees to run a business you need employees to grow the business there’s a difference
Hit 220k today. Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 34k in January 2025..
I would really love to know how much work you did put in to get to this stage
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear that you saved me from huge financial debt with just a small Investment, thank you Jihan Wu you’re such a life saver
I’m surprised that this name is being mentioned here. I stumbled upon one of his client’s testimonies on CNBC news last week.
I’m favoured, 90K every week! I can now give to the locals in my communities and also support God’s work and the church. God bless America,, thank you Mr Jihan Wu😊🎉
Waking up every 10th of each month to £210,000 it’s a blessing to I and my family… Big gratitude to this same Jihan Wu🙌
That last comment from Graham assume that the compagny dont just fire employes as soon as headwin is coming lowering their stock price. The security is an illusion.
Also employees get health insurance and 401k matching, while the business owner does not.
It’s also way more work and way more risk..
Great, a bakery gets to spend 80% of their income on flour and butter. Must be amazing to be a bakery owner.
No as much safety as employees anymore
The business doesn’t get any business and you go broke. Or you have a good month then two bad months and go broke. Or you never get off the ground because you don’t have the personality to hustle people, so you go broke. But, you find a good paying job with benefits, show up do the work, live a smart budgeted life and have stability. On the side, sure if it works for you, do a little thing and add to your steady income. These kinds of videos leave so much out.
Business is high risk high reward. Employee is low risk low reward, if you get layed off you go to the next Job. If your Business is bankrupt, you’re screwed big time.
In germany as a company you pay taxes before expenses and After😂
Immer Vorzahnung, Nachzahlung…
The business also has elements of risk and varying incomes where as the employee is more consistent in its income. There can be a lot of money in owning a business but also a lot of liability and risk too.
You can choose to not withhold taxes and pay them all at once at the end of the year. Business also pays tax on every dollar employee earns, called payroll tax. It’s different than the companies income tax.
In Germany if you make 100.000 $ you are left with 40.000 in the pocket. Vat 19% Taxes 30% , Health insurance 10% and bookkeeping 2500$. If don’t have at minimum 100k,its better to be an employee.
Employee: low risk, low reward
Business: high risk, high reward