LLC vs S-Corp Tax Comparison Calculator

Compare tax liability as an LLC vs S-Corp. See how much you can save on self-employment tax with an S-Corp election.

By Konstantin Iakovlev · Updated September 2026 · Source: IRS — S Corporation Compensation and Medical Insurance Issues

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LLC Total Tax

$22,364.55

S-Corp Total Tax

$19,782.16

Annual S-Corp Savings

$2,582.39

Side-by-Side Comparison

Gross Business Income$100,000.00
LLC | S-Corp
SE Tax / FICA$14,129.55 | $9,180.00
QBI Deduction (§199A)$15,367.05 | $7,082.00
Federal Income Tax$8,235.00 | $10,602.16
State Income Tax$0.00 | $0.00
Total Tax$22,364.55 | $19,782.16
Net Take-Home$77,635.45 | $80,217.84

S-Corp Breakdown

Reasonable Salary$60,000.00
Distributions$40,000.00
FICA on Salary (employer + employee)$9,180.00

Electing S-Corp status could save you approximately $2,582.39/year in self-employment taxes. This assumes IRS accepts your reasonable salary of $60,000.00. Consult a CPA for your specific situation.

Use the LLC vs S-Corp Tax Comparison Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Choosing between an LLC and an S-Corporation comes down to which structure leaves more money in your pocket after taxes, and this tool runs both scenarios side by side to show the difference. The main lever is payroll tax: LLC profits are exposed to self-employment tax at 15.3%, while an S-Corp can trim payroll tax by paying the owner a reasonable salary and treating the rest as distributions.

On the LLC side, the calculation stacks income tax on top of self-employment tax. For the S-Corp, it adds income tax, payroll taxes on the reasonable salary, and income tax on the remaining distributions, then sets the two totals against each other. Both paths run through the 2026 tax brackets and standard deductions, and the 20% Section 199A deduction is applied below the 2026 threshold ($201,750 of taxable income, $403,500 for joint filers). For the LLC it covers the whole profit less half the self-employment tax; for the S-Corp only the profit left after the salary and the employer payroll tax, since wages earn no deduction.

An S-Corp only works if owner-employees draw a reasonable salary. The IRS sets no percentage of profits; courts weigh factors such as the owner's training, duties and time spent, and what comparable businesses pay for similar services. These figures assume tax planning is handled optimally, so treat the output as a starting point: state taxes, fringe benefits, and the added administrative cost of running an S-Corp all shift the real-world answer.

Consulting Business with $120,000 Annual Profit

  1. 1 A single consultant generates $120,000 in business profit and needs to compare LLC versus S-Corp taxation, assuming a reasonable S-Corp salary of $60,000 (50% of profits).
  2. 2 LLC: self-employment tax is $120,000 × 92.35% × 15.3% = $16,955, and half of it ($8,478) is deductible. Taxable income before the QBI deduction is $120,000 - $8,478 - $16,100 standard deduction = $95,422; the QBI deduction is capped at 20% of that, $19,084, leaving $76,338 taxed at the 2026 brackets for $11,506. Total: $28,462.
  3. 3 S-Corp: FICA on the $60,000 salary is 15.3% = $9,180, half paid by the company and deductible ($4,590). Taxable income before QBI is $120,000 - $4,590 - $16,100 = $99,310, but QBI is only the company's profit after the salary and that payroll tax, $55,410, so the deduction is $11,082. That leaves $88,228 and $14,122 of income tax. Total: $23,302.
  4. 4 The S-Corp saves about $5,160 a year: $7,775 less payroll tax, minus the $2,616 of extra income tax from its smaller QBI deduction. Weigh that against payroll processing and the $1,000 to $3,000 a year an S-Corp typically adds in accounting costs.

Source: IRS — S Corporation Compensation and Medical Insurance Issues · Last updated: September 2026

Frequently Asked Questions

When does it make sense to elect S-Corp status?
Generally when your net business income exceeds $50,000-$60,000 per year. At that point, the self-employment tax savings from paying yourself a reasonable salary and taking the rest as distributions can outweigh the added costs of S-Corp compliance.
How much can I save on self-employment tax with an S-Corp?
As an LLC, you pay 15.3% self-employment tax on all net income. As an S-Corp, you only pay FICA taxes on your salary. On $120,000 net income with a $60,000 salary, payroll tax falls from $16,955 to $9,180, about $7,775 less; the smaller QBI deduction gives some back, leaving roughly $5,160 a year for a single filer at 2026 rates.
What are the downsides of S-Corp election?
Added complexity includes mandatory payroll processing, quarterly payroll tax filings, a reasonable salary requirement, and typically higher accounting costs ($1,000-$3,000+ per year). It may not be worth it for lower-income businesses.

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