He wasn't implying it was free money. He simply means you're paying the employer's portion as well when you are self-employed. There is no reason to do this on excess income once you have paid yourself a reasonable salary. To determine a reasonable salary simply examine what you would make if you were employed in that same job function by another company. If you are ever audited you can show you made a good faith effort to determine reasonable salary and you will be fine. Many people set it lower than typical industry rates and are never even audited, because frankly the IRS has better things to do. It typically needs to be dramatically below what you would make in industry for you to be audited. Talk to any CPA and they'll tell you the same thing. Taking excess profits from an LLC as a distribution is an entirely legal and appropriate thing to do.