S Corp distributions based on gross receipts or net income?

My business is an LLC that is taxed as an S Corp. I am the only employee/shareholder. I pass along the state’s excise tax when billing for my service Fees.

 

I have been using the "60 salary/40" on GROSS receipts of service Fees (including excise tax) to determine my salary and distributions.

 

Have I been doing this wrong? Is it supposed to be based on NET profit?