Business tax / Free financial tools

S Corporation Salary & Distribution Comparison

Compare the cash effect of two supportable salary scenarios before discussing compensation with your adviser.

US federal • 2026 · Instant results · No sign-up

Enable JavaScript to use this interactive calculator. The calculation method and assumptions are explained below.

How this calculator works

Both scenarios start with the same business profit, other income and additional administration cost. Employee/employer payroll taxes and ordinary federal income tax are modeled for each salary. Remaining pass-through profit is distributed.

Planning estimate only. Review the assumptions alongside the result before using it for a tax, financing or business decision.

IRS 2026 tax tables · IRS self-employment tax

Common questions

Does the lower-tax scenario tell me what to pay?

No. Reasonable compensation is a legal requirement based on facts. A mathematically lower tax amount does not establish that a salary is appropriate.

Are distributions the same as dividends?

Not in this model. It models ordinary S corporation pass-through profit and distributions, not C corporation dividend treatment or shareholder basis limits.

Put your numbers into context.

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