S-Corp vs Sole Proprietor Tax Calculator
Enter your net business income and a reasonable salary. We'll show you exactly how much you'd save (or not) by electing S-Corp status.
Your business profit after expenses
$
IRS requires reasonable compensation (typically 40-60%)
$
Gusto, Stripe Payroll: ~$1,500–3,000/year
$
⚠️ Estimates only. Tax rates updated for 2026. Consult a CPA for advice specific to your situation.
Annual Tax Savings with S-Corp
$22,731
18.9% of income saved
Sole Proprietorship
Self-Employment Tax$33,911
Federal Income Tax$14,284
State Income Tax$11,160
Total Tax$59,355
Take Home$60,645
S-Corporation
Payroll Tax on $60,000$9,180
Federal Income Tax$14,284
State Income Tax$11,160
Payroll Processing Cost$2,000
Total Tax + Costs$36,624
Take Home$83,376
How S-Corp saves you money: As a sole proprietor, all $120,000 is subject to 15.3% self-employment tax. With an S-Corp, only your salary ($60,000) is subject to payroll taxes. Your distribution ($60,000) avoids payroll tax entirely.