An S-Corp election may change how an active LLC owner pays Social Security and Medicare taxes. This free calculator compares the self-employment tax on single-member LLC profit with payroll taxes on an illustrative owner salary, then subtracts extra S-Corp costs. It does not determine a reasonable salary or calculate your total tax bill.
Calculate the differenceFree 2026 calculator
Start with the sample, then enter your expected profit, a salary you want professionally evaluated, and your estimate of extra S-Corp operating costs. Results update as you type.
Net profit after ordinary business expenses, before your own wages and new S-Corp costs.
An illustration only. Salary must be supported by your duties and comparable pay; the calculator cannot decide it.
Only added costs, such as payroll service, additional tax preparation, and administration.
No sign-up or tax ID is required. These numbers stay in your browser and are not submitted to IntegraFin.
Illustrative annual difference after added costs
$3,245
Lower modeled employment taxes and added costs with the S-Corp scenario.
This is a comparison of selected costs, not total tax savings or a recommendation to elect S-Corp status.
Both halves of S-Corp Social Security and Medicare tax are counted. The employer and employee shares are $5,355 each in this simplified scenario.
Profit remaining after proposed salary, employer FICA, and extra costs
$41,645
Before income tax and other adjustments. This is not automatically an available or advisable distribution.
Reasonable compensation, income-tax effects, other wages, state rules, election timing, and payroll setup can change the outcome.
A single-member LLC is generally disregarded for federal income tax purposes unless it elects another classification. An eligible LLC can file Form 2553 to elect S-Corporation treatment. The election changes federal tax treatment; it does not turn the LLC into a different state-law entity. Eligibility, filing timing, payroll readiness, and state rules deserve review before an election.
See LLC tax-setup supportThe IRS requires an S-Corporation to pay a shareholder-employee reasonable compensation for services before making non-wage distributions. Wages are subject to payroll taxes, and the IRS can reclassify distributions as wages if pay is unreasonably low. Use a salary supported by the owner's work and comparable pay; this calculator deliberately does not supply a “safe” percentage.
For the sole-proprietor scenario, the model applies the 2026 Social Security and Medicare rates to 92.35% of net self-employment profit, subject to the Social Security wage base and the usual $400 net-earnings threshold. For the S-Corp scenario, it includes both employer and employee FICA on the proposed salary. The 2026 Social Security wage base is $184,500; Medicare has no wage cap.
The estimate assumes one active owner, no other W-2 wages or self-employment income, and profit before owner pay. It excludes income tax and QBI differences, the half-SE-tax deduction effect, Additional Medicare Tax, federal and state unemployment taxes, health insurance, retirement plans, state entity taxes, and election eligibility. Those omitted items can change the real outcome.
Explore the self-employment tax calculatorAn eligible LLC may elect S-Corporation tax treatment by filing Form 2553 with the IRS. The LLC remains an LLC under state law. Ownership, timing, and other eligibility rules must be checked before filing.
There is no universal percentage. The IRS requires reasonable compensation for services before non-wage distributions. Duties, experience, time, comparable pay, and how the business earns money all matter.
No. An owner-employee’s W-2 salary is generally subject to employee and employer Social Security and Medicare taxes. This calculator includes both shares of those taxes.
No. It compares selected federal employment taxes and subtracts your estimate of added annual S-Corp costs. It does not calculate income tax, QBI effects, state taxes, Additional Medicare Tax, unemployment taxes, benefits, retirement contributions, or other wages.
Under your inputs, the modeled S-Corp payroll taxes plus added costs exceed the sole-proprietor self-employment tax. That does not settle the entity decision because other tax and business factors are outside this comparison.
These rules were checked on October 6, 2026. Read the current guidance and have a professional apply it to your facts.