S-Corp Election Tax Savings Estimator

As a sole proprietor or single-member LLC, you pay 15.3% self-employment tax on all net profit. By electing S-Corp status, only your reasonable salary is subject to payroll taxes — the remaining profit passes through as a distribution, avoiding SE tax. This tool calculates your potential savings and the income threshold where S-Corp makes sense.

Net Business Profit (before salary) ($)

Proposed Reasonable Salary ($)

IRS requires a salary comparable to market rate for your role

Annual S-Corp Admin Cost ($)

Payroll service + extra CPA fees (~$1,500–$4,000)

Sole Prop SE Tax (15.3% on all profit)

S-Corp Payroll Tax on Salary only

Distribution (no SE tax)

Gross SE Tax Reduction

Less: S-Corp Admin Cost

Net Annual Savings

S-Corp Break-Even Income