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    S-Corp tax savings calculator

    See how much self-employment tax you could save by electing S-Corp status vs staying an LLC or sole proprietor.

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    In a typical IRS-defensible range (40–70% of profit).

    Estimated annual savings
    $7,775
    LLC / Sole prop
    $16,955
    15.3% SE tax on 92.35% of profit
    S-Corp payroll tax
    $9,180
    15.3% FICA on salary only

    Estimate only. Doesn't include federal/state income tax, payroll processing costs (~$500–$1,500/yr), or extra tax-prep fees. Talk to a CPA before electing S-Corp status.

    How the S-Corp savings work

    As a single-member LLC or sole proprietor, all of your business profit gets hit with 15.3% self-employment tax (Social Security + Medicare). Elect S-Corp status and only the "reasonable salary" you pay yourself is subject to that 15.3% payroll tax — the remaining profit is distributed as an owner draw, which skips SE tax entirely.

    • S-Corp usually starts paying off around $60k–$80k in net profit.
    • You must pay yourself a reasonable salary via W-2 payroll — not $0.
    • Extra costs: payroll service, separate 1120-S return, higher CPA fees.
    • Election is made via IRS Form 2553.

    Run your S-Corp books in SnapBooks

    Track salary vs owner draws, categorize deductible expenses automatically, and generate the reports your CPA needs at year-end.

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