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LLC vs S-Corp Tax Calculator
Compare payroll tax differences between an LLC (sole prop) and an S-corp salary split. See the rough range before you commit.
This focuses on payroll tax only. The real decision also involves income tax, QBI, and state-level costs.
Estimate payroll-tax savings from an S-Corp split
Compare self-employment tax (sole prop/LLC) vs payroll taxes on an owner salary (S-Corp). This is a simplified estimate.
Tip: if you leave salary blank, we’ll use 60% of profit as a starting estimate. Then validate with the salary tool.
Payroll + extra tax prep can materially change the net benefit.
See the full LLC vs S-corp picture
X1 can model the full decision: payroll taxes, QBI impact, admin costs, and state rules.
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Assumptions and limits
- Compares self-employment tax (LLC/sole prop) to payroll taxes on an S-corp salary plus distributions.
- Uses current payroll tax constants, including the Social Security wage base and Additional Medicare thresholds.
- Does not model income tax, QBI, state tax, or other credits.
- Admin costs (payroll services, extra filings, state fees) can offset savings and should be included.
Questions to ask your CPA
- What salary range would you defend for my role?
- How do payroll savings compare to admin and state costs?
- Does an S-corp election affect my QBI deduction?
- What is the timeline for making the election official?
Decision support
Know the tradeoff before you file
Use the estimate to decide whether a full review is worth it.
LLC vs S-corp is a payroll tax tradeoff
The payroll tax gap is the starting point. The real decision includes admin costs, QBI, and state rules.
Decision checklist
- Estimate profit and a defensible salary.
- Add admin costs (payroll + tax prep + state fees).
- Check the S-corp election deadline.
- Review QBI impact and state-specific rules.
Questions for your advisor
- What does the break-even point look like in dollars?
- How do state fees change the answer?
- What is the best effective date for the election?
This tool is for planning and coordination only. It does not provide tax or legal advice. Confirm eligibility and numbers with a qualified professional.
