Hi, if one owns a business that is overall losing money- earning less money than expenses, does he have to take off a maaser from money he takes (as a salary, for example) for living expenses? Thank you.
Thank you for your question.
In order to answer your question, we need to clarify what are called “expenses” with regarding to maaser. Expenses incurred for the actual running of the business i.e. purchasing merchandise, electric bills, rent, sales tax, etc. which are considered the cost of running the business, are subtracted from the “profit” the business is making. For example, if the business made $150,000 in sales, but the merchandise cost them $60,000, there was only $90,000 earned. The rent of the store, electric bills, supplies, advertising, etc. ($40,000) which are mandatory expenses in order to run the business, and also subtracted and not considered profit. Therefore, the profit leftover would be $50,000, and you would give $5,000 to maaser. Your take home pay, however is not considered and “expense”, but the profit, and capital that you gained from running the business. Therefore, if your business is earning $50,000, and you are taking a $70,000 salary, which is now putting the business into the red, that is not considered that the business is losing money.