S-Corp Tax Savings Calculator

Estimate whether an S-Corp election may reduce your self-employment tax after accounting for salary, payroll taxes, state rules, and compliance costs.

Business Inputs

Annual Net Business Profit ($)

Your total business revenue minus all business expenses

Estimated Reasonable Salary ($)

What you'd pay someone else to do your role (IRS requirement)

Estimated Payroll Service Cost ($/yr)

Additional Accounting Cost ($/yr)

Extra CPA cost for Form 1120-S vs Schedule C filing

Tax Year

🔧 Advanced Tax Settings ▼

Self-Employment Tax Rate (%)

SS Wage Base Limit ($)

Medicare Tax Rate (%)

State S-Corp Franchise Fee ($/yr)

e.g. California's $800 minimum franchise tax

Your Estimated Results

LLC Default SE Tax (est.): $0

S-Corp Payroll Tax (est.): $0

Estimated Gross Tax Savings: $0

Compliance Costs (payroll + CPA): -$0

Estimated Net Benefit: $0 / year

ESTIMATE ONLY: This is a simplified estimate, not tax advice. Results do not account for state-specific rules, exact payroll structure, or all deductions. Consult a qualified CPA before making any decisions.

How This Calculator Works

This calculator estimates the potential self-employment tax savings from an S-Corp election by comparing:

LLC default: Self-employment tax (15.3%) on 92.35% of all net profit
S-Corp election: FICA taxes (15.3%) only on your reasonable salary — distributions avoid SE tax

It then subtracts estimated compliance costs (payroll service + additional accounting) to show the estimated net benefit.

When an S-Corp Election May Help

Net profit consistently exceeds $50,000–$80,000/year
You can pay yourself a reasonable salary below total profit
You are comfortable with payroll requirements
Your state recognizes federal S-Corp elections

When an S-Corp May Not Help

Net profit is below $40,000–$50,000 (compliance costs outweigh savings)
Your reasonable salary equals or exceeds your total profit
Your state has high S-Corp filing fees or franchise taxes (e.g., California's $800 minimum)
You prefer minimal administrative complexity

Calculator FAQs

How accurate is this calculator?

This calculator provides rough estimates based on simplified assumptions. It does not account for state-specific rules, the exact payroll tax structure, or all possible deductions. Always consult a CPA before making tax decisions.

What profit level makes an S-Corp worthwhile?

Most tax professionals suggest the S-Corp election makes financial sense at net profits of $50,000 to $80,000 or more per year, after accounting for additional payroll and accounting costs.

Does the election need to be made every year?

No. Once you file Form 2553 and it is accepted, the S-Corp election stays in place until you revoke it or the LLC no longer qualifies.

Can I undo an S-Corp election?

Yes, but revoking an S-Corp election generally means you cannot re-elect S-Corp status for five years without IRS approval. This is an important consideration before electing.