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Checker 01 · 2026 rules

S-corp tax calculator: what the election would save or cost

For a one-owner business. Enter your profit, your state and the salary you would pay yourself. The check compares a year as you are today with the same year as an S corporation, line by line, with your state’s payroll taxes, entity taxes and city taxes included.

Updated October 24, 202651 jurisdictionsSources IRS · SSA · BLS · state agencies

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You’ll need: last year’s Schedule C (line 31) and the W-2 from any job you also hold. Everything else starts at a typical value you can change.

Each state treats the election differently. The check shows only the questions that matter there.
Your business's profit after expenses. Money you take out for yourself does not lower it.
Where do I find this?

Schedule C, line 31 (“Net profit or (loss)”) on last year’s return.

For this year: sales minus business expenses so far, scaled to a full year. Owner draws are not an expense.

What you would pay yourself through payroll. The IRS expects a reasonable salary for the work you do.
Where do I find this?

No form shows this yet: you choose it. It should be about what you would pay someone else to do your work.

The salary finder just below shows what employees in your job earn in your state or metro area. What the IRS looks at.

Salary finder: what people in your job earn (BLS)
Pick the job closest to what you do most of the week.
Pick your metro area if it is listed. Pay varies by area.
Another job
Typical values: change them if you know yours
Published one-person prices: $492 to $684 a year (October 2026).
Where do I find this?

Your payroll provider’s price page or quote, for one employee: you. Published prices compared.

A survey average: the fee for Form 1120-S minus the fee for Schedule C (2020 fees).
Where do I find this?

Ask your preparer what a Form 1120-S (the S corporation’s own return) would cost, then subtract what you pay now for Schedule C.

Not sure? Keep 22%. It changes line 5 only.
Where do I find this?

Your taxable income is on Form 1040, line 15. Find the rate for that income and your filing status in the IRS rates and brackets table.

Changes the result only above $200,000 of earnings ($250,000 if married filing jointly, $125,000 if married filing separately).
Where do I find this?

The box checked under Filing Status at the top of your Form 1040.

Choose a state and enter your profit and salary to see the comparison.

How the estimate works

As a sole proprietor or single-member LLC, you pay self-employment tax of 15.3% on 92.35% of your net profit. The 12.4% Social Security part stops at the 2026 wage base of $184,500; the 2.9% Medicare part has no cap.

After an S election, the business pays you a salary. Social Security and Medicare apply to the salary only: 7.65% from the business and 7.65% from you. The profit left after your salary passes to you without those taxes. That gap is where the savings come from.

The election also adds costs: a payroll service, a separate S-corp tax return, federal unemployment tax, and in many states unemployment insurance, paid leave or disability programs on your salary, an entity tax or a city tax. The check counts each one your state has, from the state’s own rules.

Line 5 is the change in your federal income tax. Your salary does not count toward the 20% qualified business income deduction, so a higher salary can raise your income tax even as it lowers the profit left over. The check applies your bracket to that change.

The salary has to be reasonable

An S-corp owner who works in the business is an employee, and the IRS expects a reasonable salary for that work. There is no formula. The IRS lists the factors courts weigh, including your training and experience, your duties, the time you put in, and what comparable businesses pay for similar services. The salary finder shows what employees in your job are paid in your state or metro area, from the Bureau of Labor Statistics.

What the IRS looks at

If you decide to elect

  1. File Form 2553

    By March 15 for a calendar year

    File it no later than 2 months and 15 days after the year begins, or any time in the year before. There is no IRS fee. How to elect

  2. Take any state step

    New York CT-6 · New York City and Washington, DC do not recognize it

    New York has a separate state election, Form CT-6. Most states follow the federal election automatically.

  3. Start payroll for yourself

    Register for withholding and unemployment

    Register with your state, then run payroll and file the quarterly Form 941. New hire paperwork by state

  4. File Form 1120-S each year

    15th day of the 3rd month after the year ends

    The S corporation’s own return, with a Schedule K-1 to you.

State by state

The calculator covers every state. These guides explain the rules that move the result most.

Guides

Sources

IRS Publication 15 (2026); IRS Schedule SE and Form 2553 instructions; IRS, Wage compensation for S corporation officers; Internal Revenue Code section 199A as amended by P.L. 119-21; Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025; each state’s revenue and labor agency pages and statutes.

Every figure in the check was read on an official page and checked a second time. Rates checked October 24, 2026. How we check facts.

New to the S election? Start with the basics.

What is an S corp?