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Self-Employment Tax Savings Calculator

This calculator helps you estimate how much federal tax you could save each year by electing S corporation status for your business.

If you’re currently taxed as a sole proprietorship or partnership, you pay self-employment tax (15.3%) on your entire net business income. An S corporation can reduce that burden. By paying yourself a reasonable salary and taking the rest as profit distributions, you avoid payroll tax on the distribution portion.

This tool uses current federal tax rates and wage caps to give a precise estimate based on your income and salary assumptions. It accounts for:

  • The Social Security wage base limit
  • Medicare and Additional Medicare surtaxes
  • The split between salary and profit
  • Your filing status (Single or Married Filing Jointly)

Answer a few quick questions to see how much you could save by restructuring your compensation strategy.

Enter the total profit your business will earn after expenses but before owner compensation.
This should reflect a “reasonable salary” for your role, based on what someone else would be paid to do the same work.
What is your federal tax filing status?

Mapped Fields

Enter the self-employment tax rate (%):
Enter the Social Security tax rate (%):
Enter the income subject to Social Security tax before the cap applies:
Enter the Medicare tax rate (%):
Additional Medicare surtax (%):
Enter the Additional Medicare surtax threshold for someone filing as a single individual (if applicable):
Enter the Additional Medicare surtax threshold for someone filing as married filing jointly (if applicable):
Enter the employer portion of payroll tax (%):
Enter the employee portion of payroll tax (%):

Calculated Fields

Enter the Additional Medicare surtax threshold (if applicable):