Our S Corp Reasonable Salary Calculator helps business owners estimate an appropriate salary for themselves as shareholder-employees. Our calculator bases its estimate on:
- Annual business net income
- Typical salary for a full-time employee in your role and geographic region
- Hours per week you work in the S Corp
- Whether the job requires a professional credential or license
Our calculator then estimates a reasonable salary and potential payroll tax savings based on your inputs.
Note: this calculator is for informational purposes only and does not constitute legal or tax advice.
What is your annual estimated business net income (revenue minus expenses)?
What is the typical starting salary for a full-time employee in your role and geographic region?
Approximately how many hours a week do you work for your business?
Does your job require a professional credential or license?
| Your estimated reasonable compensation | |
| Potential payroll tax savings from electing S-Corp status using this estimate |
What's “reasonable compensation”?
The IRS mandates that S-corporation owner-employees pay themselves “reasonable compensation” with W-2 wages. Essentially, this means you must receive a salary comparable to what you'd pay someone else to perform your duties as a physician, along with any other business responsibilities you hold.
Determining exactly what constitutes “reasonable compensation” can be complex and contentious. Misjudging this amount can lead to issues with the IRS, so consult with a tax professional to accurately assess your reasonable salary.
More resources:
Tax Planning for Physicians: What Are the Benefits of Using S-Corp Tax Strategies?
