LLC vs S Corporation Tax Savings Calculator

How to do it

1. 1
   Step 1: Open LLC vs S Corporation Tax Savings Calculator and add your input

   Type your numbers or text, add your file, or pick the options you need. Nothing is uploaded: everything stays in your browser.

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   Step 2: What LLC vs S Corporation Tax Savings Calculator does

   Compare self-employment tax as an LLC or sole proprietor with an S corporation salary.

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   Step 3: Read the result and compare

   The result appears at once. Change one value to see how the answer moves, then keep the figure that fits your case.

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   Step 4: Copy or save it

   Copy the result or download it. For an important decision, confirm it with the official source or an adviser.

About this tool

Enter your business profit, the salary you would pay yourself, the extra yearly cost of running an S corporation and any other income. The calculator compares federal income tax plus self-employment or payroll tax under each setup and shows the saving.

The difference

As a sole proprietor or single-member LLC you pay self-employment tax (15.3%) on almost all profit. As an S corporation you pay yourself a salary with payroll tax and take the rest as distributions, which are not subject to payroll tax.

Reasonable salary

The IRS expects a reasonable salary for the work you do. Setting it too low is a common audit trigger. The tool lets you try different salaries.

What is included

Federal income tax with the standard deduction and, optionally, the 20% qualified business income deduction (not limited by wages or service-business rules here), Social Security up to the wage base, Medicare, the employer half of payroll tax as a business expense and your extra yearly costs. State taxes, state fees and the additional 0.9% Medicare tax are not included.

Worked example

In 2026 a single owner with $120,000 of profit pays $16,955 of self-employment tax and about $28,462 of federal tax in total as a sole proprietor. As an S corporation paying a $60,000 salary, payroll tax is $9,180 and the total tax about $23,038, so after $1,500 of extra costs the S corporation saves about $3,924.

Tips for best results

Check every box before you rely on a result, because one wrong digit changes the whole answer. Use the exact figures from your payslip, bill, certificate or contract, and keep a note of the date you calculated. Rates, thresholds and rules change from time to time, so for tax, fees and legal matters treat the output as an estimate and confirm with the official source named on this page. You can run as many scenarios as you like; nothing is saved or sent, and refreshing the page clears the boxes.