The owner's salary line is one of the easiest places for a small-business P&L to look better or worse than it really is. A few things I check on almost every deal: - What the owner actually does. If they run sales, schedule crews and fix the equipment, you're replacing two or three roles, not one. Price the jobs, not the person. - Market pay for those roles where the business is located, with payroll taxes and benefits added. A $90K manager costs closer to $110K once you load it. - Family on payroll. A spouse paid $60K for light bookkeeping is a real add-back. A son who runs the warehouse for $35K is probably a cost you'll pay more for after close. - Where the owner's money really comes from. Some owners take a small salary and big distributions, some run personal expenses through the company. Look at all of it together, not just the W-2. - Whether you plan to be the operator. If you are, lenders will still want to see debt service covered after a fair salary for you. That's the number that tells you if the deal works. Getting this one line wrong can move SDE by six figures on a business under $2M. How do you figure out a fair replacement salary when the owner wears every hat?