55 Pa. Code § 4300.142 – Profit organizations.

(a) If a proprietor of an organization organized for profit performs services as a salaried employe of the organization, a reasonable allowance of compensation for these services is an allowable cost if both of the following apply:
1. (1) The services are actually performed in a necessary function.
2. (2) The person is qualified to perform these services.
(b) A reasonable allowance for compensation means that the compensation allowance is an amount that would ordinarily be paid.
(c) A necessary function means that if the owner had not rendered the services, another person would have to be employed to perform them. A necessary function also means that the function be pertinent to the operation and sound conduct of the organization.
(d) Compensation to voting members of an organization organized for profit is subject to the requirements for directors of nonprofit organizations in order for the cost to be included as an allowable expense.