S-Corp tax savings calculator
Enter your yearly profit and the salary you'd pay yourself. The calculator compares self-employment tax as a regular LLC with payroll tax as an S-Corp, then subtracts the extra cost of running one. It's a first look, not a decision.
Updated November 2026
Calculator
- Self-employment tax as an LLC$16,955
- Payroll tax on a $60,000 salary$9,180
- Extra S-Corp costs$2,500
Worth a real conversation. Your accountant would check the salary and state costs first.
Check my real numbersFederal self-employment and payroll tax only. Income tax, the qualified business income deduction, the 0.9% additional Medicare tax and state taxes aren't included.
How the calculator works
As a regular LLC, you pay self-employment tax on 92.35% of your profit, at 12.4% for Social Security up to the yearly wage base and 2.9% for Medicare. As an S-Corp, you and the company pay the same 15.3% on your salary through payroll, and the rest of the profit comes out as distributions without that tax. The difference, minus what it costs to run payroll and file a separate return, is the estimate.
Why the salary matters so much
The IRS expects S-Corp owners who work in the business to pay themselves a reasonable salary before taking distributions. Set it too low and you risk back payroll taxes and penalties. Set it too high and the savings disappear. The calculator warns you when the salary looks low against the profit, but only a look at your role and industry can tell you the right number.
What the estimate leaves out
- Income tax, which you pay on the whole profit either way
- The qualified business income deduction, which your salary reduces slightly
- The 0.9% additional Medicare tax at higher incomes
- State taxes, like California's 1.5% S-Corp tax
- Retirement contributions, which work differently once you're on payroll
Read the S-Corp vs LLC guide for worked examples, or book a call to check your actual numbers.
Looks worth it?
We check the salary, your state and the costs, then file Form 2553 if it pays.
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How much can an S-Corp save me?
It depends on profit and the salary you pay yourself. Many owners with steady profit above roughly $60,000 to $80,000 save several thousand dollars a year in self-employment tax, after the extra cost of payroll and a separate return.
What salary should I enter?
A reasonable salary for the work you do, based on what the business would pay someone else for your role. Paying too little is a common audit issue.
Does the calculator include income tax?
No. Income tax applies to the whole profit either way, so it compares only the self-employment tax and payroll tax that change.
How do I become an S-Corp?
An eligible LLC or corporation files Form 2553 with the IRS, usually by March 15 for the election to start that year.
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