Enter your business profit and the salary you would pay yourself. You will see the payroll tax you save, the income tax that changes, and what is left after running costs, using 2026 federal rates. It accounts for the type of business you run and the wages you pay your team. No email needed to see your result.
Content creator? Use the S corp calculator for content creators.
| Payroll tax saved | |
| Change in federal income tax | |
| Cost of running the S corp | |
| What you keep |
Every tax both ways, the 20% deduction both ways, and the result at four other salary levels. Philip gets a copy of your numbers so he can answer questions. No spam.
Self-employment tax, Social Security and Medicare on an S corp salary (2026 wage base of $184,500, plus the additional Medicare tax), federal unemployment tax, Florida reemployment tax at the new-employer rate, your running costs, and the 20% qualified business income deduction with the 2026 income limits, wage limits and service business rules.
State income tax outside Florida, retirement contributions, health insurance, other credits and deductions, and the timing of the election. It assumes one owner. Businesses with several owners, an existing C corporation or significant property need a full analysis.
The IRS does not publish a safe salary or a safe percentage. It expects reasonable pay for the work you personally do. Profit earned by your employees, inventory and equipment is not pay for your own work, which is why the guide is lower for businesses with staff. It is our general guide, not an IRS rule.
Without an S corp, every dollar of profit carries 15.3% self-employment tax up to the Social Security wage base. With one, payroll tax applies only to the salary you pay yourself. The rest comes to you as a distribution.
Your salary is not business income for the 20% qualified business income deduction, so a salary usually shrinks it. At higher incomes the deduction is capped by the wages the business pays, and your own salary counts toward that cap, so the S corp can increase it.
Payroll every pay period, a separate corporate tax return, state unemployment filings and cleaner books. Savings have to clear those costs every year, not only in a good one.
The 20% deduction works differently once taxable income passes $201,750 (single) or $403,500 (married filing jointly) in 2026.
Health, law, accounting, consulting, financial services, performing arts and athletics are specified service businesses. Their deduction phases out over the next $75,000 of income ($150,000 joint) and is gone above that.
Dealerships, retail, construction, manufacturing, e-commerce and most other businesses keep the deduction at higher incomes, but it is limited to 50% of the W-2 wages the business pays, or 25% of wages plus 2.5% of qualifying property.
For a business with few employees, an owner salary paid through an S corp can raise the wage limit and unlock more of the deduction. The calculator shows this when it applies.
There is no single number. Once profit is comfortably above what a reasonable salary for your role would be, payroll tax savings usually start to outweigh the running costs. The calculator shows where that happens for your numbers.
What the business would pay someone else to do the work you do, based on your role, hours and experience. The IRS looks at the facts, not a percentage. Keeping support for the number, such as wage data for similar roles, matters if it is ever questioned.
Yes. An eligible LLC can elect S corp tax treatment by filing Form 2553. For an existing calendar-year business, the election is generally due by March 15 to apply to that year. Late election relief is available in many cases.
Florida has no personal income tax, and an S corp generally does not pay Florida corporate income tax except in limited cases, such as when it owes federal built-in gains tax. You will register for Florida reemployment tax once you run payroll.
That changes the analysis. An S corp can have only one class of stock and must make distributions in proportion to ownership, and converting a C corporation can trigger built-in gains tax on a later sale. Talk to us before electing.
The calculator gets you close. A 30-minute conversation with Philip gets you the answer for your actual return.
This calculator is an estimate for general information, not tax advice for your situation. Results depend on your full return. Written by Philip DiMartino, Florida licensed CPA.
