You Have to Pay Yourself First
Most food truck owners skip this step. They pay vendors, pay staff, pay the commissary, and whatever is left over at the end of the month becomes their "salary." That is not payroll. That is guessing.
Whether you are a solo operator or running a crew of four, you need a payroll system. This guide covers how to pay yourself, what to pay your staff, and how to keep labor costs from eating your profit.
How Owner Compensation Works
Your pay structure depends on your business entity.
Your next steps
Most operators sort these out before their first event.
Finance your truck or equipment
Compare equipment and working-capital options, with a soft check to start.
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Sole Proprietorship / Single-Member LLC
You take an owner's draw - a transfer from the business account to your personal account. There is no payroll tax withheld at the time of the draw. Instead, you pay self-employment tax (15.3%) on your net business income when you file your annual return. You also make quarterly estimated tax payments to the IRS.
This is the simplest structure and works fine when you are starting out.
S-Corp Election
Once your net profit exceeds roughly $40,000-$50,000 per year, an S-corp election can save you money. Here is how it works:
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| Structure | Net Profit | SE Tax / Payroll Tax | Tax Savings |
|---|---|---|---|
| Sole Prop | $80,000 | $12,240 (15.3% on all) | $0 |
| S-Corp (salary $36,000) | $80,000 | $5,508 (15.3% on $36K) | $6,732 |
| Sole Prop | $60,000 | $9,180 | $0 |
| S-Corp (salary $30,000) | $60,000 | $4,590 | $4,590 |
The S-corp election costs $500-$1,500/year in additional accounting fees. If your savings exceed that, it is worth it. Talk to a CPA - this is one of the highest-ROI conversations you will have as a business owner.
What to Pay Your Staff
Food truck wages vary by market, but here are the national benchmarks.
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| Role | Hourly Range | Notes |
|---|---|---|
| Line cook | $14 - $18/hr | Your most important hire. Experienced cooks command $17+ |
| Prep cook | $13 - $16/hr | Can be part-time, morning shifts only |
| Cashier / window | $12 - $15/hr | Customer-facing, handles POS and orders |
| General helper | $12 - $14/hr | Floater who preps, cleans, assists service |
| Manager / lead | $16 - $22/hr | Runs the truck when you are not there |
In high-cost markets (NYC, SF, LA), add $2-$5/hr across the board. In lower-cost markets, these ranges still hold - paying below $12/hr makes it nearly impossible to retain anyone.
Tipped vs Non-Tipped Wages
Some states allow a tip credit, meaning you can pay a lower base wage if tips make up the difference. In practice, most food truck operators pay full hourly wages and let tips be a bonus. Tip jars and POS tip prompts typically add $2-$5/hr per employee in extra compensation without costing you anything.
If you do use a tip credit, verify your state's rules. Federal tipped minimum wage is $2.13/hr, but many states set it much higher or do not allow tip credits at all.
Payroll Taxes: What You Actually Owe
When you hire employees, your costs go beyond the hourly wage.
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| Tax | Rate | Cap | Who Pays |
|---|---|---|---|
| Social Security (FICA) | 6.2% | $168,600 (2026) | Employer + Employee (each) |
| Medicare (FICA) | 1.45% | No cap | Employer + Employee (each) |
| Federal Unemployment (FUTA) | 0.6% | First $7,000/employee | Employer only |
| State Unemployment (SUTA) | 1% - 8%+ | Varies by state | Employer only |
| Workers Comp | 1% - 5% | Varies by state/industry | Employer only |
Rule of thumb: Budget an additional 10-15% on top of gross wages for employer-side payroll taxes and workers comp. If you pay someone $15/hr, your actual cost is $16.50-$17.25/hr.
Labor Cost Benchmarks
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| Monthly Revenue | Recommended Labor % | Monthly Labor Budget | What That Covers |
|---|---|---|---|
| $8,000 | 0% (solo) | $0 | Owner does everything |
| $12,000 | 15-20% | $1,800 - $2,400 | One part-time helper |
| $20,000 | 20-25% | $4,000 - $5,000 | One full-time + one part-time |
| $30,000 | 25-30% | $7,500 - $9,000 | Two full-time + one part-time |
| $50,000+ | 28-32% | $14,000 - $16,000 | Full crew, manager |
If labor exceeds 30% of revenue consistently, something is wrong. Either your pricing is too low, your volume does not justify the staff count, or your scheduling is inefficient.
When to Hire Your First Employee
This is the most common question, and the answer is math.
Hire when the revenue you are leaving on the table exceeds the cost of the hire. Specifically:
Start with a part-time helper at 15-20 hours per week for events only. This costs roughly $800-$1,200/month and lets you test the economics before committing to full-time staff.
Simple Payroll Options
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| Option | Cost | Best For |
|---|---|---|
| Square Payroll | $35/mo + $6/employee | Already using Square POS |
| Gusto | $40/mo + $6/employee | Full payroll + benefits admin |
| QuickBooks Payroll | $45/mo + $6/employee | Already using QuickBooks |
| DIY (manual + accountant) | $0 + $200-$500/quarter | Solo operator with no employees |
Any of these options handle tax withholding, filing, and direct deposit. Do not try to manage payroll taxes manually once you have employees - the penalties for late or incorrect filings are steep.
Track Labor Cost Per Event
The real insight comes from knowing your labor cost per event, not just your monthly total. A $2,000 event with $300 in labor costs is a 15% labor ratio - excellent. A $600 event with the same $300 in labor is 50% - you lost money on staff that day.
Use the per-event profit calculator to model different staffing scenarios and see how labor costs change your breakeven point. Then track actual labor costs per event in PitStop to know exactly when you can afford your next hire.
Before you apply
Verify every fee in this guide with the issuing agency before you pay it; fee schedules change mid-year and the agency's own page is the only number that counts. Run your first few events through the per-event profit calculator, and start the paperwork 3–4 months before opening day: inspection slots, commissary letters and certifications take longer than the application itself.