S Corp Tax-Savings Calculator

    See how much you might save in self-employment tax by electing S corporation status. The tool compares a reasonable salary and distribution split against sole proprietor tax.

    Calculator

    $
    $

    Reasonable owner salary (must be at most net income).

    %
    %
    Tax Under Sole Proprietorship
    $35,617
    Tax Under S Corp
    $31,180
    Annual Saving
    $4,437
    Disclaimer

    Illustrative estimate — consult a tax advisor.

    —

    How the Calculation Works

    1. 1Enter your annual business profit
    2. 2Set a reasonable salary for the owner
    3. 3View the estimated self-employment tax savings

    Frequently Asked Questions

    How do S corps reduce taxes?

    Only the owner salary is subject to self-employment tax, while distributions are not, which can lower the overall tax burden.

    What is a reasonable salary?

    It is the pay a similar role would earn in the open market; setting it too low to avoid tax can trigger scrutiny.

    Automate This with ShiftSphere

    Stop calculating manually. Let ShiftSphere handle payroll, attendance, and leave automatically.

    Start Free Trial