Calculators

S-corp or sole proprietor, for 2026.

Both paths from the same net profit: self-employment tax against payroll tax on a salary, income tax on each, what the S-corp costs to run, and the salary where the two come out even. The same arithmetic the app runs on a real ledger.

Your situation

Nothing typed here leaves your browser. Both paths recompute as you type.

Filing statusState

Expected net profit from the businessThis year, after expenses and before any salary. What Schedule C would show.Other W-2 wagesFrom a job or another entity. They fill the brackets and use up the Social Security wage base first.Other ordinary incomeA K-1 share, interest, rental. No payroll tax on this on either path.

The salary the S-corp would pay youDefaults to 60% of net profit, a common starting point, not a rule. The IRS expects a reasonable wage for the work; the rest is a distribution.

What an S-corp costs to run

Payroll service, a yearRunning one salary through a payroll provider.The extra returnPreparing the 1120-S the S-corp files on top of your own.State entity tax or feeModelled for California from the statute; zero elsewhere unless you know yours.

Side by side, 2026

Type a net profit to compare the two paths.

Stay a sole proprietor

Net profit$0.00

Self-employment tax15.3% on 92.35% of profit$0.00

Federal income tax$0.00

State income tax$0.00

Total$0.00

Elect S-corp

Salary$0.00

DistributionNo payroll tax on this$0.00

Payroll tax on the salaryBoth halves, 15.3%$0.00

Federal income tax$0.00

State income tax$0.00

Running the S-corpPayroll, the extra return, the state fee$1,400.00

Total$1,400.00

The election costs$1,400.00

Break-even salaryNone at this profit

What this does not model

The 2% shareholder health insurance treatment for a working S-corp owner.
How a retirement plan interacts with a lower W-2 wage base.
State payroll taxes and unemployment insurance on the salary.
The Social Security benefit effect of taking a lower wage now.
The 0.9% additional Medicare tax above $200,000 of wages, on either path.

Arithmetic over the figures you typed, not advice to elect. An S-corp brings payroll, a second return and state filings; talk to an accountant before you file Form 2553.

On your real books

Contha runs this from your actual Schedule C.

Connected accounts instead of typed guesses, the comparison kept current through the year, and once you elect, the S-corp beside your personal books with the wages and distributions recorded and the reasonable-compensation question answered from your own figures.

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