S Corp Tax Calculator
Estimate your S Corporation tax savings by comparing reasonable salary vs. distribution strategy. Helps optimize payroll and reduce self-employment tax.
Published by:
isCalculator Editorial Team
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How to use this tool?
How to Use the S Corp Tax Calculator
- Enter Net Business Income – Input your total business profit (e.g., $150,000). Must be a positive number.
- Enter Reasonable Salary – Input the salary you would pay yourself as an S Corp owner (e.g., $80,000). Cannot exceed net income.
- Enter Other Business Expenses – Input deductible expenses (e.g., $20,000). Use zero if none.
- Click "Calculate Tax Savings" – The calculator compares S Corp vs. Sole Proprietor taxes.
What the Results Mean:
- S Corp Tax – Total tax (FICA + income tax) under S Corp structure.
- Sole Proprietor Tax – Total tax (self-employment + income tax) as a sole proprietor.
- Potential Savings – Difference between the two (positive = savings with S Corp).
Notes: All values in USD. Assumes 15.3% FICA rate, 24% income tax rate, and SE tax on 92.35% of net income. Adjust inputs for your actual tax situation.
Previous Results
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Frequently Asked Questions
An S Corporation is a special tax designation that allows business income to pass through to shareholders, avoiding double taxation, while potentially reducing self-employment tax.
It compares the total tax (FICA + income tax) under S Corp vs sole proprietorship, assuming a flat income tax rate and standard FICA rates.
A reasonable salary is the amount you would pay a non-owner for similar services. It must be market-based and cannot be set too low to avoid taxes.
