Where does an S-corp election start paying for itself?
Not whether to make it — the profit level where the payroll-tax savings would start outweighing what the election costs, on your own numbers. For a sole proprietor or single-member LLC only; every other setup gets a shorter, different answer.
Free, and no card. About two minutes. "I don't know how I'm taxed" is a real, useful answer here.
Informational only — not tax advice, and no reasonable-compensation determination is made or implied. This prices the payroll-tax portion only, from the figures you enter; it leaves out the Additional Medicare Tax, state-level taxes, and income-tax side effects. Confirm with a CPA before acting.
A threshold, not a verdict
“Should I become an S corporation?” usually gets answered with a rule of thumb — a profit number somebody heard once. The real answer depends on your own numbers: what a reasonable salary would be for the work you do, and what it would actually cost to run the election. Neither of those is a number anyone can hand you.
This tool takes your own low-and-high guess for both, and works out the profit level where the payroll-tax savings from the election first outweigh what it costs — then shows where your expected profit sits against that range. Below it, above it, or somewhere in between, where the real answer depends on which end of your own estimates turns out to be closer to right. That's arithmetic, not advice, and it only applies to a sole proprietor or single-member LLC weighing the election for the first time.
Frequently asked questions
Does this tell me whether to become an S corporation?
No. It works out the profit level where an S-corp election's payroll-tax savings would start outweighing what the election costs, using your own salary and cost estimates, and shows where your expected profit sits against it. Whether to actually make the election is yours and your CPA's to decide.
Why does it ask for a range instead of one salary figure?
Because "reasonable compensation" has no formula. The IRS lists nine factors — training, duties, what comparable roles pay — and publishes no weighting between them. Asking for one invented number would be pretending to more precision than anyone actually has.
Why does it refuse to run for an S corporation, a C corporation, or a partnership?
Each is a different question. An S corporation already made this election — there's nothing left to compare. A C corporation's salary-versus-dividend math is a different comparison entirely. And whether a partner's share of profit counts as self-employment income depends on the kind of partner they are, which has been the subject of ongoing litigation rather than one settled rule — this tool declines to guess at it.
What isn't included in the crossover figure?
The Additional Medicare Tax, because it applies the same way to wages and self-employment income once combined with the rest of a household's income this tool never asks about. Any state-level tax on S corporations, which varies by state. And income-tax-side effects like the Section 199A deduction. All three are named on the results screen rather than folded in silently.
Do I need an account?
No. Every figure here is free with no email wall. Signing in only keeps the result so a later run can show you what moved.