Drawings are money or assets you take out of your business for personal use. This applies to sole traders and partners—not company directors.
Key points:
- Drawings are not a business expense and can’t reduce your taxable profits.
- You are taxed on the profit your business makes, not how much you withdraw.
- Drawings reduce your capital in the business but do not affect your tax bill.
Example:
You earn €50,000 in business profit and take out €20,000 during the year. You’re still taxed on the full €50,000.
