# S corp tax calculator

https://salesbond.app/tools/s-corp-tax-calculator/
Updated: 2026-11-05

# S Corp Tax Calculator: S Corp vs LLC Savings

An S corp saves self-employment tax because only the owner’s salary carries the 15.3% payroll tax, not the distributions. With $120,000 of profit and a $60,000 salary, the S corp pays $11,222 against $16,955.46 of self-employment tax, saving $5,733.46 after $2,000 of extra costs. Free.

Enter the business profit for the year before your own pay, the salary you would pay yourself and the yearly cost of running an S corp: payroll service, the 1120-S return and state fees. Results update as you type and stay in this browser until you start over.

## S corp savings example

A consultant’s business makes $120,000 of profit in 2026. As an S corp it would pay the owner a $60,000 salary and spend $2,000 a year on payroll and the extra return.

| Tax | Amount |
| --- | --- |
| Self-employment tax as an LLC | $16,955.46 |
| FICA on the salary, both halves | $9,180 |
| FUTA | $42 |
| Extra S corp costs | $2,000 |
| S corp saves | $5,733.46 |

The S corp pays $11,222 in total. After the salary, the company’s $4,590 half of FICA, FUTA and the extra costs, $53,368 of profit is paid out as a distribution without Social Security or Medicare tax.

## How the comparison works

- **Sole proprietor or LLC:** self-employment tax = 92.35% of profit × 15.3% (12.4% Social Security up to $184,500, 2.9% Medicare), plus 0.9% Additional Medicare over $200,000 single or $250,000 joint.
- **S corp:** 15.3% FICA on the salary, half paid by the company and half withheld from the owner, plus FUTA of 0.6% on the first $7,000.
- **Savings:** self-employment tax − (S corp payroll taxes + extra costs).

## Before you elect S corp status

Set the salary first: it must be reasonable for your work, and a higher salary means smaller savings. Then add up the costs of payroll, bookkeeping and the state. Check your self-employment tax and quarterly payments with the [self-employment tax calculator](https://salesbond.app/tools/self-employment-tax-calculator/), and the take-home pay on your S corp salary with the [payroll calculator](https://salesbond.app/tools/payroll-calculator/).

## Frequently asked questions

### How does an S corp save on taxes?

As a sole proprietor or single-member LLC you pay 15.3% self-employment tax on 92.35% of the whole profit. An S corp pays you a salary that carries the same 15.3% of payroll tax, and the rest of the profit reaches you as a distribution with no Social Security or Medicare tax.

### How much salary do I have to pay myself?

A reasonable salary: about what the business would pay someone else to do your work. The IRS requires shareholders who work in the business to take reasonable compensation before distributions, and can reclassify distributions as wages, with back taxes and penalties, if the salary is too low.

### At what profit is an S corp worth it?

When the tax saved on distributions is larger than the extra cost of running payroll, filing Form 1120-S and paying any state fees. With $2,000 of extra costs and a salary at half the profit, the S corp starts to save at about $32,000 of profit; enter your own figures to see your point.

### Is an LLC taxed as an S corp?

Only if it elects to be. A single-member LLC is taxed like a sole proprietor by default, and one with several members like a partnership. It becomes an S corp for tax purposes by filing Form 2553 with the IRS; the LLC stays an LLC under state law.

### What does this calculator leave out?

It compares employment taxes only, at 2026 rates. Federal and state income tax, the qualified business income deduction, state unemployment tax on your salary and state taxes or fees on S corps can change the result, so check the numbers with a tax professional before you elect.

### Is what I enter stored or sent anywhere?

No. The calculation runs in your browser and the figures are saved only in this browser so you can come back to them. Nothing you enter is sent to SalesBond or anyone else. Click Start over to clear it.

Related tools: [self-employment tax calculator](https://salesbond.app/tools/self-employment-tax-calculator/), [payroll calculator](https://salesbond.app/tools/payroll-calculator/), [tax bracket calculator](https://salesbond.app/tools/tax-bracket-calculator/). More on sales and running a sales team on the [SalesBond blog](https://salesbond.app/blog/) and the [home page](https://salesbond.app/).

## Official sources

- [IRS: S corporation compensation and medical insurance issues](https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues) — reasonable compensation before distributions.
- [IRS Schedule SE (Form 1040)](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf) — self-employment tax on 92.35% of profit.
- [IRS Publication 15 (2026)](https://www.irs.gov/pub/irs-pdf/p15.pdf) — Social Security wage base of $184,500, FICA and FUTA rates.

**Updated on Nov 5, 2026.** This calculator is for information only and is not tax, legal or payroll advice. Results compare 2026 employment taxes only; check the S corp election with the IRS or a tax professional.