Get a direct answer based on your revenue, expenses, reasonable salary, S-Corp costs and state. We compare real modeled take-home—not just the headline 15.3% self-employment tax rate.
There is no universal S-Corp income threshold and no fixed IRS 60/40 safe harbor. Your break-even depends on your own salary, costs, taxes and state.
Enter your numbers, then calculate your break-even.
We compare take-home after modeled taxes and the S-Corp costs you entered.
$0/month estimated difference
Uses the reasonable salary and annual S-Corp costs you entered.
This reconciles the take-home difference dollar for dollar. Positive numbers help the S-Corp; negative numbers favor staying a sole proprietor.
| Reasonable salary entered | $0 |
|---|---|
| Estimated pass-through distributions | $0 |
| Salary share of modeled owner compensation | — |
| Sole proprietor self-employment tax | $0 |
| S-Corp employee + employer payroll tax | $0 |
| Sole proprietor federal income tax | $0 |
| S-Corp federal income tax | $0 |
| Sole proprietor personal state tax | $0 |
| S-Corp personal state tax | $0 |
| S-Corp QBI deduction | $0 |
Salary share is informational only. It does not determine whether compensation is reasonable. Reasonable compensation depends on the services performed and the facts of the business.
Load a scenario, then change any number. The calculator uses the same live 2026 model for every example.
A shareholder who works for an S corporation generally must receive reasonable compensation as wages before non-wage distributions. The salary remains subject to Social Security and Medicare taxes. Remaining pass-through business income is generally not treated as shareholder wages merely because it is distributed.
The 2026 model uses 6.2% Social Security tax for both employee and employer up to the $184,500 Social Security wage base, plus 1.45% Medicare tax for each side with no wage-base limit. Additional Medicare Tax is employee-only when applicable.
Eligible S-corporation owners may qualify for the Section 199A deduction on qualified pass-through business income. Reasonable compensation paid to the shareholder-employee is not QBI. This calculator therefore models QBI on pass-through profit after salary and employer payroll tax.
No. The break-even point changes with reasonable salary, business expenses, S-Corp administration costs, QBI, federal tax and state tax. That is why this calculator gives you a break-even based on your numbers instead of using a generic $60k, $75k or $100k rule of thumb.
No fixed 60/40 rule is built into this calculator. Reasonable compensation depends on the services performed and the facts of the business. The salary field is an assumption for planning, not a determination that the salary is reasonable.