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LLC vs. S-Corp Tax Calculator

Estimate the federal employment-tax difference between a sole-proprietor-taxed business and an S-Corp. This is a limited comparison—not your total tax savings or a recommendation to elect S-Corp status.

No signup · Calculations stay in your browser · Reviewed September 20, 2026

Scope: one active owner, no other W-2 wages, no other self-employment income and no spouse wages/self-employment income. Federal and state income tax, QBI, FUTA/SUTA, benefits and retirement effects are not modeled. If these apply, use a CPA for a complete comparison.

Your scenario

Annual profit after ordinary business expenses, but before owner salary, employer payroll tax and extra S-Corp costs.
Enter a defensible salary for the work performed. No fixed salary percentage is an IRS safe harbor.
Only incremental costs over the sole-proprietor scenario: payroll service, extra preparation and administration.

What this estimates

For the sole-proprietor scenario, regular self-employment tax uses 92.35% of business profit, with the Social Security annual limit. For the S-Corp scenario, both employee and employer Social Security and Medicare taxes are included. We also compare Additional Medicare liability using the selected filing status.

The Social Security wage limit is $184,500 in 2026 and $176,100 in 2025. Medicare has no wage cap. Any displayed difference after extra costs excludes income-tax effects; it is not a promise of money saved.

Why salary and distributions matter

The proposed salary must reflect reasonable compensation for services. Distributable profit is what remains after gross salary, employer payroll taxes and extra S-Corp costs—not simply profit minus salary. A loss-making combination is flagged rather than shown as a valid distribution.

Is an LLC different from an S-Corp?

An LLC is a legal form; S-Corp is a federal tax election available to eligible entities. Here “LLC” specifically means a single-owner business taxed as a sole proprietorship. This tool does not model partnerships, corporate income taxes or every eligibility rule.

There is no universal break-even salary or income threshold. Wage caps, reasonable compensation and excluded taxes can change the comparison. Bring the assumptions and results to a qualified tax professional.

Working from home? The home-office estimator explains a separate potential deduction.

Sources and review

Calculation rules checked September 20, 2026. These tools are educational estimates, not personal financial or tax advice.

Found a problem? Report it. See our calculation and correction policy.