Usually what I do is pay myself a reasonable salary about half of what I
would pay myself. Then pay the other half as a draw.

Here is a great article on paying yourself a salary I found on a blog on this
site (you may have to copy and paste it in your browser):

http://www.sba.gov/community/blogs/community-blogs/small-business-cents/5-tips-setting-your-salary-business-owner

The main thing is that you withhold enough taxes so at the end of the year
you don't have a big tax bill to pay. Talk to your accountant and make a
strategy that works for you. If you don't have an accountant get one, they
will save you more money than they cost, by far.

You may want to visit the IRS web site and look for the article "S
Corporation Employees, Shareholders and Corporate Officers." As another
poster mentioned, you can get in trouble if you don't handle things properly.

Yes, federal tax rules require a reasonable salary be paid to shareholders
who perform services to the s-corp. You could take money out and then
classify as payroll, submit 941 and payroll taxes at year end/quarterly, etc.
I suggest you get professional help, it is easy to get yourself into trouble
if you don't know the specific record keeping requirements for
s-corporations.

Hi,  Check out our resources about S-Corps here. If you're not finding the answers you need, another great option is to get in touch with a local Small Business Development Center, which is one of SBA's resource partners. They're located across the country andprovide free business counseling and answers. Visit SBA Direct to find your local SBA resource partners by entering your zip code.

Anyone have any input on this? Thanks

Also, can you point me in the right direction of a really good source of information for operating a Delaware S-corp? Thanks