Result
How to use this calculator
Enter your net business profit, the reasonable salary you would pay yourself through an S corp, and expected S corp admin costs (payroll service plus state filings). The calculator compares the 15.3% self-employment tax on all profit against payroll taxes on salary only, minus admin costs.
The formula
LLC (sole prop) SE tax = profit × 92.35% × 15.3%. S corp payroll tax = salary × 15.3% (employer and employee halves). Savings = LLC SE tax − S corp payroll tax − admin costs. Income tax on profits is roughly the same in both setups, so it is not part of the comparison.
Example
Profit $120,000, salary $60,000, admin $1,500: as a sole prop you owe about $16,955 in SE tax; through an S corp you owe about $9,180 in payroll tax plus $1,500 admin — saving roughly $6,275 per year.