How do I use this S-corp vs Schedule C payroll tax calculator?

Enter filing status, Schedule C net profit (before owner salary and S-corporation overhead), other household W-2 wages used for wage-base and Additional Medicare calculations, your proposed reasonable salary, and annual incremental S-corporation costs. Optionally select planning goals to see advisory discussion notes with the result. All math runs in your browser — nothing is saved or uploaded.

Do I need to enter a reasonable salary for an S corporation?

Yes. Reasonable compensation is facts-and-circumstances — duties, time, comparable pay, and distribution history. This tool does not apply a default percentage of profit. You enter your own salary estimate; the modeled payroll-tax difference is sensitive to that figure.

What are advisory notes for discussion?

After you calculate, optional goal checkboxes can add plain-language discussion notes tied to your entered numbers — for example self-employment tax exposure, entity-election context, or reasonable compensation context. These notes are planning discussion material only — not tax advice, not an election recommendation, and not a filing position.

Does this calculator recommend an S-corporation election?

No. The result is an illustrative modeled payroll-tax difference only — not tax advice, not an entity-election recommendation, and not a filing position. Entity elections depend on reasonable compensation, QBI, state taxes, retirement and health benefits, multi-owner rules, and timing that this page does not model.

What taxes are not included in this comparison?

Federal income tax, the half-SE-tax deduction, QBI under section 199A, state and local taxes, shareholder distributions and basis, and multi-owner S-corporation rules are excluded. Those items can move a full-year outcome in either direction.

S-Corp Payroll Tax Calculator

Model the payroll-tax difference — not a broad savings claim.

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Schedule C vs S corporation · 2026 payroll tax

Compare self-employment tax and S-corporation FICA on your numbers

Use this free S-corp vs sole proprietor payroll tax calculator to model the annual difference between Schedule C self-employment tax and S-corporation employer plus employee FICA on the reasonable salary you enter. Optional advisory notes turn the result into client-safe discussion material — illustrative only, not tax advice.

Compare payroll taxes

Enter your numbers below. All calculations run in your browser — nothing is saved or uploaded. You must enter a proposed reasonable salary; no default percentage is applied.

What are you working on? (optional)

Select any that apply to see discussion notes with your result. No names or client details — the numbers below are enough.

Reduce self-employment tax exposureEvaluate a possible S-corporation electionPressure-test a reasonable compensation figure

Filing status

Schedule C net profit (before salary and S-corp costs) *

Net profit from the business before any owner W-2 salary or S-corporation overhead.

Your other W-2 Social Security wages (Boxes 3 + 7) *

From jobs other than the S corporation — used for Social Security wage base only.

Household W-2 Medicare wages (Box 5) *

Combined Box 5 from all W-2s in the household (excluding the proposed S-corp salary).

Proposed reasonable salary *

Facts-and-circumstances compensation — enter your own estimate. No percentage default is provided.

Annual incremental S-corporation costs *

Payroll service, separate return, bookkeeping, state/entity fees. Enter 0 if none.

This is not an entity-election recommendation. Federal income tax, QBI, state tax, and distributions are not included in the result.

Need a full federal estimate?

The 2026 Tax Planner combines W-2 and Schedule C for a broader federal picture.

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What is included

Payroll-tax-only comparison
You enter salary and costs — no default %
Advisory discussion notes by goal
Side-by-side calculation trace
Fails closed on invalid inputs
100% browser-only — no persistence
No account required

Modeled in the result

• Sole-proprietor SE tax (92.35% earnings factor)
• S-corporation employer and employee FICA on entered salary
• Additional Medicare tax using household Box 5 wages
• Your entered annual incremental S-corporation costs
• Optional advisory discussion notes by planning goal

Not included (can change the outcome)

• Federal income tax and half-SE-tax deduction effect
• QBI (§199A) differences between entity types
• State income, franchise, or entity taxes
• Shareholder distributions, basis, or multi-owner rules

Frequently asked questions

Common questions about comparing Schedule C self-employment tax and S-corporation payroll tax with this free 2026 calculator.

What is the difference between Schedule C self-employment tax and S-corporation payroll tax?: Schedule C sole proprietors generally pay self-employment tax (12.4% Social Security and 2.9% Medicare) on net earnings after the 92.35% factor, subject to the annual wage base. An S corporation pays employer and employee FICA on W-2 wages you enter — payroll tax applies to salary, not the full net profit. This calculator models only that payroll-tax difference plus your entered annual S-corporation costs; it does not include federal income tax, QBI, or state tax.
How do I use this S-corp vs Schedule C payroll tax calculator?: Enter filing status, Schedule C net profit (before owner salary and S-corporation overhead), other household W-2 wages used for wage-base and Additional Medicare calculations, your proposed reasonable salary, and annual incremental S-corporation costs. Optionally select planning goals to see advisory discussion notes with the result. All math runs in your browser — nothing is saved or uploaded.
Do I need to enter a reasonable salary for an S corporation?: Yes. Reasonable compensation is facts-and-circumstances — duties, time, comparable pay, and distribution history. This tool does not apply a default percentage of profit. You enter your own salary estimate; the modeled payroll-tax difference is sensitive to that figure.
What are advisory notes for discussion?: After you calculate, optional goal checkboxes can add plain-language discussion notes tied to your entered numbers — for example self-employment tax exposure, entity-election context, or reasonable compensation context. These notes are planning discussion material only — not tax advice, not an election recommendation, and not a filing position.
Does this calculator recommend an S-corporation election?: No. The result is an illustrative modeled payroll-tax difference only — not tax advice, not an entity-election recommendation, and not a filing position. Entity elections depend on reasonable compensation, QBI, state taxes, retirement and health benefits, multi-owner rules, and timing that this page does not model.
What taxes are not included in this comparison?: Federal income tax, the half-SE-tax deduction, QBI under section 199A, state and local taxes, shareholder distributions and basis, and multi-owner S-corporation rules are excluded. Those items can move a full-year outcome in either direction.

Sources and limitations

Rates and thresholds use 2026 IRS and SSA sources archived in our federal tax configuration, including IRC §1401 (SE tax), IRC §3101 / Publication 15 (FICA), Form 8959 (Additional Medicare), and SSA wage base data. Reasonable compensation is facts-and-circumstances — you enter your own salary; no percentage is labeled as defensible.

This tool is illustrative only and is not CPA/EA reviewed. Consult a qualified tax professional before making entity elections. For a broader federal estimate, use the 2026 Tax Planner.