Whether the sponsoring company’s owner’s salary is included when calculating net profit
A company offered to sponsor me for an employment-based green card and work together. My attorney says the key issue is whether the company can demonstrate the ability to pay my wage.
However, they say if the owner’s monthly salary is included, there isn’t much net profit left. My question is whether the company owner’s salary counts toward net profit.
Apparently, if the owner’s salary is excluded, there’s net profit, but if it’s included, net profit shrinks. Since this is an important factor in deciding whether to work at this company, I’d really appreciate accurate advice.
When a company wants to demonstrate its ability to sponsor an employee for an employment-based green card, net profit is generally calculated after subtracting all company expenses — including employee wages as well as the owner’s own salary. So excluding the owner’s salary can make net profit look inflated, which in turn can make the company appear to have more financial capacity to sponsor.
So the company’s net profit can look different depending on whether the sponsoring owner takes their own salary or not. To be precise, if the owner takes a larger salary, the company’s own net profit decreases, which lowers the company’s apparent ability to pay wages for an employment-based case. So a structure where the owner’s salary is reduced, leaving more as net company profit, tends to strengthen the wage-paying-ability argument — I hope this is helpful.
Also, if the company owner tries every possible method to minimize taxes by manipulating expenses, that can eventually create problems too. Since this situation is fairly common, we recommend proceeding only after thorough consultation with an attorney.