LLC vs S-Corp Calculator

Compare LLC vs S-Corp tax savings with side-by-side analysis, self-employment tax breakdown, and optimal salary sensitivity chart. Free, fast, and private — runs entirely in your browser.

Disclaimer

This is a simplified estimate based on 2024 US Federal tax rules. It does not account for state taxes, all deductions, credits, or the QBI phase-out. Consult a CPA for your specific situation.

Filing Status

Annual Revenue ($)

Business Expenses ($)

S-Corp Reasonable Salary ($)

IRS requires a "reasonable salary" for S-Corp owners

Revenue: $150,000 − Expenses: $30,000 = Net Profit: $120,000

LLC (Sole Proprietorship)

$28,051

total tax burden

Self-Employment Tax (15.3%)$16,955

SE Tax Deduction (50%)-$8,478

QBI Deduction (20%)-$24,000

Taxable Income$72,922

Federal Income Tax$11,096

Effective Rate23.4%

Take-Home$91,949

S-Corp Election

$24,781

total tax burden

Salary (W-2)$60,000

Distribution (no payroll tax)$60,000

Payroll Tax (on salary only)$9,180

QBI Deduction (on distribution)-$12,000

Federal Income Tax$15,601

Effective Rate20.7%

Take-Home$95,219

Potential Annual Tax Savings with S-Corp

$3,270

That's $273/month more in your pocket

Tax Burden Comparison

LLC$28,051

S-Corp$24,781

Recommendation

An S-Corp election could save you approximately $3,270/year. This likely justifies the additional costs of payroll processing and a separate S-Corp tax return.

S-Corp Additional Costs (est.)

$1,000 - $2,000/year

Payroll service + S-Corp tax return (Form 1120-S)

Net Benefit After Costs

$1,770 - $2,270

After accounting for filing costs

S-Corp Salary Sensitivity Analysis

How different salary levels affect your S-Corp tax savings.

Salary	Distribution	Total Tax	Savings vs LLC
$36,000 (30%)	$84,000	$20,053	+$7,998
$48,000 (40%)	$72,000	$22,417	+$5,634
$60,000 (50%)	$60,000	$24,781	+$3,270
$72,000 (60%)	$48,000	$27,145	+$906
$84,000 (70%)	$36,000	$29,509	-$1,458
$96,000 (80%)	$24,000	$31,875	-$3,823

The IRS requires S-Corp owners to pay themselves a "reasonable salary" comparable to what other businesses pay for similar services. Typically 40-60% of net profit.

How It Works

LLC (Sole Proprietorship): All net profit is subject to self-employment tax (15.3% on the first $168,600 for SS + 2.9% Medicare on all earnings). You can deduct 50% of SE tax from your adjusted gross income.

S-Corp: You pay yourself a W-2 salary, and payroll taxes (15.3%) only apply to that salary. The remaining profit passes through as a distribution, which avoids payroll tax entirely.

QBI Deduction: The Qualified Business Income deduction allows a 20% deduction on qualifying business income, subject to income thresholds and other limitations.

Disclaimer: This calculator provides estimates for educational purposes. State taxes, local taxes, credits, and many other factors are not included. Always consult a CPA or tax professional.

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How to Use LLC vs S-Corp Calculator

1Enter your annual business revenue and expenses.
2Set your filing status and desired S-Corp salary.
3Compare total taxes under LLC vs S-Corp.
4Review the salary sensitivity chart for optimal savings.

Frequently Asked Questions

How does the LLC vs S-Corp Calculator work?▾

Enter your business income and expenses. The calculator compares total tax liability under LLC (self-employment tax on all profit) vs S-Corp (salary + distributions split).

When should I elect S-Corp status?▾

Generally when your net profit exceeds $40,000-$50,000/year, the self-employment tax savings from S-Corp can outweigh the additional administrative costs.

Is this calculator free?▾

Yes, completely free with no sign-up required. Use it as many times as you need.

How accurate is this calculator?▾

Uses current US tax brackets and SE tax rates. Results are estimates — consult a CPA for your specific situation.

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About LLC vs S-Corp Calculator

Compare LLC vs S-Corp tax savings with side-by-side analysis, self-employment tax breakdown, and optimal salary sensitivity chart. Free, fast, and private — runs entirely in your browser.

NexTool's LLC vs S-Corp Calculator is completely free to use with no sign-up required. Your data is processed directly in your browser and never sent to our servers, ensuring complete privacy and instant results.