Brokers/Sellers recasting payroll taxes as owner's salary?

by a searcher from Instituto Tecnológico de Santo Domingo

2 weeks ago

Seeing more business brokers recasting payroll taxes for the owner's salary. But why? This only works if the buyer doesn’t pay that salary to anyone—which is rare. Whether it's the buyer or a GM, the payroll expense stays. What am I missing?

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8 comments

intermediary from Rutgers-The State University of New Jersey-Camden - Rutgers School of Business

I agree it is an add back because it is the best way to present SDE. Each buyer is different. Some want to operate and others don't. Some will buy cash and others need financing. I do the work to make it easier for the buyer to look at. And I believe it is easier for the Buyer to add their own assumptions based on their position. Each buyer can take the SDE and allocate to payroll, debt service etc using their own judgment.

1 week ago | like reply | 0 likes

searcher from University of Maryland at College Park

If owner is operator, expense stays. Adjustment would be for market rate,

1 week ago | like reply | 1 like

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