Free tool · 2026 payroll tax rates
S-Corp tax savings calculator: is an S-Corp worth it for your LLC?
Enter your yearly profit and the salary you would pay yourself. See how much self-employment tax an S-Corp election could save, after the extra payroll and accounting costs.
Estimated yearly saving
—Estimate of Social Security and Medicare tax only, using 2026 rates (wage base $184,500). It leaves out income tax, the QBI deduction, state taxes (for example California's 1.5% S-Corp tax) and the 0.9% Additional Medicare Tax. Not tax advice; confirm with a CPA before you elect.
How the calculator works
- As a regular LLC, a single owner pays self-employment tax on 92.35% of the profit: 12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare on all of it.
- As an S-Corp, only your salary carries payroll tax (the same 15.3% combined, split between you and the company). The rest of the profit is paid out as distributions, with no Social Security or Medicare tax.
- The saving is the difference, minus what an S-Corp costs to run each year: payroll processing and a separate business tax return.
Payroll tax rates and the wage base come from the Social Security Administration.
S-Corp tax — frequently asked questions
How does an S-Corp save tax?
An LLC owner normally pays self-employment tax (15.3% up to the Social Security wage base, then 2.9%) on almost all of the profit. With an S-Corp election you pay yourself a reasonable salary, and only that salary carries payroll tax. The rest of the profit comes out as distributions, which are not subject to Social Security and Medicare tax.
What is a reasonable salary?
The IRS expects S-Corp owners who work in the business to pay themselves what they would pay someone else to do the same job. There is no fixed percentage. Setting the salary too low to save tax is one of the most common reasons the IRS questions an S-Corp, so agree the figure with your accountant.
When is an S-Corp worth it?
Usually once your LLC makes a steady profit well above what a reasonable salary would be, often from about $40,000 to $80,000 of profit and up. Below that, the extra payroll, bookkeeping and tax-return costs can cancel out the saving.
Can a non-US resident own an S-Corp?
No. S-Corp shareholders must be US citizens or US residents (plus certain trusts and estates). Non-resident owners usually keep the LLC taxed as a disregarded entity or partnership, or form a C-Corporation.
Does this include income tax?
No. The calculator estimates Social Security and Medicare (payroll and self-employment) tax only. Income tax, the qualified business income deduction, state taxes and the 0.9% Additional Medicare Tax can change the result, so treat it as a first estimate, not tax advice.