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Business & General

LLC vs S-Corp Tax

Compare self-employment tax savings of an S-Corp election against LLC simplicity.
Revenue minus expenses, before any owner pay or self-employment tax.
What you would pay someone else to do your job. The rest of the profit comes out as a distribution.
Payroll service, separate return, state fees.
Your top federal bracket. Used to value the deductible half of the tax.
Annual savings with S-Corp
$0
after payroll tax, admin costs, and the deduction on the employer half
LLC self-employment tax
$0
on $0 of SE income
S-Corp payroll tax
$0
on $0 salary, plus $0 in admin costs
Annual cost of each structure
💡 What this means
Estimates only, using 2026 federal figures. Ignores state tax and the 0.9% additional Medicare tax above $200,000. Talk to a CPA before electing S-Corp status.
🏛 Predictable Income

LLC vs S-Corp Tax Calculator

A single-member LLC pays self-employment tax on nearly every dollar of profit: 15.3% for Social Security and Medicare, on top of income tax. An S-Corp election splits that profit into a salary, which carries payroll tax, and a distribution, which does not. The savings can run to several thousand dollars a year, but they come with payroll runs, a separate return, and state fees. Most owners hear that an S-Corp saves money and either elect too early, when admin cost eats the savings, or wait years past the point where it would have paid for itself.

Enter your net business profit (revenue minus expenses, before owner pay), the reasonable salary you would pay yourself as an S-Corp (what you would pay someone else to do your job), and your extra annual S-Corp costs for payroll service, a second return, and state fees. Slide in your marginal income tax rate, which values the deduction on the employer half of the tax. The calculator computes LLC self-employment tax on 92.35% of profit using 2026 figures, including the $184,500 Social Security wage base, then computes S-Corp payroll tax on salary alone, adds admin costs, credits the deduction on each side, and reports annual savings with the S-Corp as the headline. The two stats show raw LLC self-employment tax and raw S-Corp payroll tax with admin costs.

The chart is two stacked bars showing the annual cost of each structure. The LLC bar is all tax. The S-Corp bar is payroll tax in sage with admin costs stacked in gold on top. A good shape has the S-Corp bar clearly shorter, with the gold slice small relative to the gap. A bad shape has the bars nearly level, or the gold slice filling most of the difference, which means the election pays the payroll company more than it saves you. The callout flags savings under $3,000 as marginal and warns when salary drops below 40% of profit, where audit risk climbs.

Predictable Income treats business income as one of three streams and asks you to run the math before making structural decisions, and entity choice is one of the most consequential. Done right, it lowers the tax drag on the stream every year. Done early or badly, it adds cost and paperwork for nothing. Re-run this each year once you can project profit, and again before you file the election.