S Corp Tax Calculator
Model 2026 S-corp reasonable salary vs. distribution, payroll-tax savings over a sole proprietorship, and the QBI deduction — federal only.
Salary / dividend split curve
| Salary | Dividend | Net-in-pocket |
|---|---|---|
| $0 | $79,000 | $74,568 |
| $5,000 | $75,050 | $75,828 |
| $10,000 | $71,100 | $77,088 |
| $15,000 | $67,150 | $78,348 |
| $20,000 | $63,200 | $79,218 |
| $25,000 | $59,250 | $79,978 |
| $30,000 | $55,300 | $80,708 |
| $35,000 | $51,350 | $81,368 |
| $40,000 | $47,400 | $81,720 |
| $45,000 | $43,450 | $81,788 |
| $50,000 | $39,500 | $81,855 |
| $55,000 | $35,550 | $81,923 |
| $60,000 | $31,600 | $81,990 |
| $65,000 | $27,650 | $82,058 |
| $70,000 | $23,700 | $81,775 |
| $75,000 | $19,750 | $81,343 |
| $80,000 | $15,800 | $80,910 |
| $85,000 | $11,850 | $80,478 |
| $90,000 | $7,900 | $80,045 |
| $95,000 | $3,950 | $79,613 |
| $100,000 | $0 | $79,180 |
S-Corp vs Sole Proprietorship: Salary, Distributions, and Tax Savings
Electing S-corp treatment for your business is one of the most commonly cited ways to reduce self-employment tax — but only on the portion of profit you pay yourself as a distribution rather than salary, and only once your reasonable salary is set correctly. This calculator models that salary/distribution split against 2026 federal figures.
As a sole proprietor, all of your net self-employment income is subject to the 15.3% self-employment tax (up to the $184,500 Social Security wage base, then 2.9% above it). As an S-corp owner, only the salary portion you pay yourself is subject to standard FICA payroll tax at the same 6.2%/1.45% rates as any W-2 employee — the remaining profit, taken as a distribution, isn't subject to that FICA layer at all. The catch is that your salary has to be reasonable for the work you do; the IRS can recharacterize an artificially low salary as disguised distributions and assess back payroll tax.
What this calculator doesn't yet model
- The section 199A Qualified Business Income deduction — worth up to 20% of qualified business income and made permanent by the One Big Beautiful Bill Act — which depends on your entity type, W-2 wages paid, and (above an income threshold) the nature of your business, so it isn't computed here
- State income tax and any state-level entity-level tax an S-corp election might trigger, both of which vary by state
- What counts as a reasonable salary for your specific role and industry — the IRS doesn't publish a fixed formula, and getting this wrong is the single biggest audit risk of an S-corp election
