How to use the profit first allocation calculator
- Enter the deposit you want to split, such as revenue you just received.
- Set a share for each account: profit, owner pay, tax and operating expenses. The numbers shown are examples, not recommended amounts.
- If you split several deposits a month, enter deposits per month to see monthly totals.
- Read the amount that goes to each account. Shares can add up to 100% or less.
Formula
Amount for an account = deposit x share / 100
Monthly total for an account = amount for an account x deposits per month
Not assigned = deposit - the sum of the amounts for the four accounts
Amounts are in whole cents, and leftover cents go one at a time to the accounts with the largest fractional cent so the amounts add up exactly.
A $10,000 deposit at 5, 50, 15 and 30
A $10,000 deposit split at example shares of 5% profit, 50% owner pay, 15% tax and 30% operating expenses gives $500, $5,000, $1,500 and $3,000, which add up to $10,000. With two deposits like this a month, the monthly totals are $1,000, $10,000, $3,000 and $6,000.
With a $100.01 deposit, the cent that does not divide evenly goes to owner pay, which gives $5.00, $50.01, $15.00 and $30.00. If the operating share were 20% instead, $1,000 of the $10,000 deposit would be left unassigned.
What the method is
Profit First is a budgeting approach where each deposit is divided into separate accounts right away, with profit set aside first, instead of paying every bill and hoping something is left. The tool is the arithmetic of that split: it takes your percentages and shows the dollars.
The percentages here are editable examples. They are not targets the page recommends, and the right split for your business depends on your costs, margins and taxes.
Taxes and other limits
The tax share stands in for whatever you plan to set aside. This tool does not calculate taxes, so ask a tax professional how much to hold back and how often to pay. It also assumes the deposit is revenue you have actually received.
To see the margin behind your numbers, use the profit margin calculator. For self-employed tax estimates try the self-employment tax calculator, see what is left after tax and costs with the freelancer take-home calculator, and plan spending with the budget planner.
Assumptions and limits
- The deposit is revenue you have received, in dollars.
- Shares are percentages of the deposit and cannot add up to more than 100%.
- The default percentages are examples and are not advice about what to use.
- No taxes are computed, and transfers between accounts are not tracked.
Frequently asked questions
How do you split revenue the Profit First way?
Divide each deposit among profit, owner pay, tax and operating expense accounts using percentages you set. The tool shows the amount for each account.
What percentages should I use?
The ones shown are examples only. Choose shares that fit your costs and taxes, and adjust as your business changes.
Why is some money left unassigned?
If your shares add up to less than 100%, the rest of the deposit is shown as not assigned. Add it to an account or leave it for later.
Can I use this for weekly or monthly deposits?
Yes. Enter the deposit size and how many such deposits you get per month to see monthly totals.