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Set up and pay an owner's draw

SOLVEDby QuickBooksQuickBooks Online714Updated October 07, 2022

Learn how to pay an owner of a sole proprietor business in QuickBooks Online.

If you're a sole proprietor, you must be paid with an owner's draw instead of a paycheck through payroll. 

An owner's draw account is an equity account used by QuickBooks Online to track withdrawals of the company's assets to pay an owner.

Follow these steps to set up and pay the owner.

Step 1: Create an Owner's Equity account

Before you can pay an owner’s draw, you need to create an Owner’s Equity account first. When you create your account, be sure to choose Equity or Owners Equity as the type of account.  To learn how to create accounts in your QuickBooks, choose your product: QuickBooks Online or QuickBooks Desktop.

Step 2: Write a check from an owner's equity account:

When you are ready to pay the owner, create a regular check in QuickBooks, not through payroll. Be sure to affect the Owners Equity account you created in Step 1.  To learn how to create checks in your QuickBooks, choose your product: QuickBooks Online or QuickBooks Desktop.

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