Free tool
S-corp salary vs distribution calculator
For S-corp owners who pay themselves a W-2 salary. See the payroll tax on the salary you choose, what is left to distribute, and how it compares with taking everything as wages. Tax year 2026.
Your S-corp
Optional
Some states exempt corporate officers from unemployment tax. Leave blank if yours does.
At this salary
Salary$70,000.00
Per month$5,833.33
Employer payroll tax$5,397.00
Employee payroll tax$5,355.00
Total payroll tax$10,752.00
Left to distribute$74,603.00
Compared with all salary
All profit as salary$139,301.44
Payroll tax on that$21,355.12
Payroll tax you save$10,603.12
$3.99 a stub.
Payroll tax only: Social Security, Medicare, Additional Medicare, FUTA, and state unemployment if entered. Income tax applies to both salary and distributions and is not shown. For your paycheck's income tax withholding, use the paycheck calculator.
Common questions
- Does this calculator tell me what a reasonable salary is?
- No. There is no formula for reasonable compensation. The IRS looks at the facts: your duties and hours, what the business would pay someone else to do your job, and pay for comparable roles. Use this to see the payroll tax effect of a salary you can support.
- Why do S-corp distributions save tax?
- Salary is subject to Social Security and Medicare on both the employee and employer side, about 15.3% together below the wage base. Distributions of profit are not wages, so they carry no payroll tax. Both are still subject to income tax.
- What does the calculator include?
- Employee and employer Social Security (6.2% each on wages up to $184,500 in 2026), Medicare (1.45% each), Additional Medicare (0.9% employee-only above $200,000), federal unemployment tax, and state unemployment tax if you enter a rate. It does not calculate income tax or the qualified business income deduction.