Start with your numbers.
Explore how owner salary and added costs change the picture. Then take the full tax comparison to your adviser.
Your business, in numbers.
Before owner salary, employer payroll taxes, and extra S corp costs.
Your FICA-taxable wages. This input is not a reasonable-pay recommendation.
Additional payroll, bookkeeping, tax preparation, and administration.
Estimated difference
after extra annual costs
Employee + employer share− $11,475
This is a starting point for a full comparison. It is not your total tax savings.
Put your numbers in contextAssumes one active owner, ordinary Schedule C profit, a valid full-year S election, and no other wages or spouse earnings. Excludes federal and state income taxes, deduction and QBI effects, FUTA/SUTA, state entity taxes, retirement and health benefits, and effects on future benefits. Your salary must be supported by a separate compensation analysis.
See the calculation and official sources
Self-employment earnings are modeled at 92.35% of profit. Social Security uses the 2026 $184,500 base and combined 12.4% rate; Medicare uses 2.9% with no earnings cap. The illustration includes 0.9% Additional Medicare above $200,000 for single/head of household, $250,000 for joint, or $125,000 for separate filers. Employment tax is zero when modeled net self-employment earnings are below $400. S corp payroll taxes include both employer and employee regular FICA, plus the employee’s applicable Additional Medicare amount. Added administration costs are then subtracted from the tax difference.
SSA contribution base · IRS self-employment tax · IRS Additional Medicare tax
Turn the result into a checklist.
Organize the election, compensation review, and ongoing tasks in one place.