S-Corp Tax Savings Calculator

Estimate your potential self-employment tax savings from an S-Corp election · Bilingual EN/ES

S-Corporation (S-Corp): tax savings calculator

Elite Tax Consulting · Las Vegas · Compare LLC/Sole Prop self-employment tax vs. S-Corp payroll tax

SE tax on everything

LLC/Sole Prop owners pay 15.3% self-employment tax on nearly all net profit

Payroll tax on salary only

S-Corp owners pay payroll tax only on their reasonable salary, not on distributions

Costs eat the gap

Payroll, a separate 1120S return, and bookkeeping add ongoing cost

Your business

Annual business net profit

Federal tax bracket

S-Corp assumptions

Reasonable S-Corp salary

Added yearly S-Corp cost (payroll + 1120S + bookkeeping)

Self-employment tax if LLC/Sole Prop (15.3%)$14,130

S-Corp payroll tax on salary (15.3%)$7,650

Added S-Corp running costs$2,000

Total S-Corp tax + costs$9,650

Est. federal income tax (same either way)$22,000

Net estimated annual savings$4,480

Reasonable salary tip: the IRS requires that S-Corp owner-employees be paid a "reasonable" salary for the work they actually perform; there's no fixed IRS percentage. Many tax professionals use roughly 30-50% of profit as a starting reference point depending on industry and role. We can help you research comparable pay and document a defensible number.

This simplified estimate assumes your profit is under the annual Social Security wage base (about $176,100 for 2025): above that threshold, only the 2.9% Medicare portion of SE tax applies to the excess, so actual savings may differ. A 0.9% Additional Medicare Tax may also apply to wages or self-employment income above roughly $200,000 (single filers; thresholds vary by filing status). Ask us for a projection based on your exact numbers.

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S-Corp election & payroll rules

Reasonable salary is based on facts and circumstances: your role and duties, what comparable positions pay in your industry, the hours you actually work, and the revenue your business generates.
To elect S-Corp treatment, file IRS Form 2553. Existing calendar-year businesses generally must file by March 15 of the year the election is to take effect; new entities generally have 75 days from formation to elect.
Once elected, you must run a formal payroll for yourself as an owner-employee: withholding, quarterly payroll filings, and year-end W-2/W-3 forms, not just a lump-sum payment at year end.
An S-Corp election does not eliminate income tax. It only reduces exposure to self-employment/FICA tax on the portion of profit paid out as a distribution above your salary; that profit is still taxed as ordinary income.
A separate corporate return (Form 1120-S) and K-1s to the owner(s) are required every year, in addition to your personal return.
Below roughly $40,000–$50,000 in net profit, an S-Corp usually is not worth it: the added payroll, return preparation, and bookkeeping costs tend to outweigh the SE tax savings.
Nevada note: there is no state personal income tax, but Nevada entities still need to keep annual list filings and a state business license current, and higher-revenue businesses may owe Nevada's Commerce Tax. Ask us if this applies to you.

Curious how this stacks up against staying an LLC, with real Las Vegas examples? Read our S-Corp vs LLC in Nevada guide →

Illustrative net-savings examples at different profit levels, assuming a reasonable S-Corp salary between 40% and 50% of net profit and $2,000 in estimated added yearly S-Corp costs.

Net Annual Profit	Reasonable Salary (40–50%)	LLC Self-Employment Tax	S-Corp Payroll Tax + Costs	Est. Net Savings*
$50,000	$20,000 – $25,000	~$7,065	~$5,060 – $5,825	~$1,200 – $2,000
$75,000	$30,000 – $37,500	~$10,595	~$6,590 – $7,738	~$2,900 – $4,000
$100,000	$40,000 – $50,000	~$14,130	~$8,120 – $9,650	~$4,500 – $6,000
$150,000	$60,000 – $75,000	~$21,190	~$11,180 – $13,475	~$7,700 – $10,000
$200,000+	$80,000 – $100,000	~$28,260	~$14,240 – $17,300	~$11,000 – $14,000+

*These are illustrative examples only, not guarantees: actual savings depend on your specific facts, industry, and filing status. Above roughly $176,100 (the 2025 Social Security wage base), the self-employment tax math changes from this simplified example, since only the Medicare portion applies to profit above that level. Ask us for a projection based on your actual numbers.