S Corp Reasonable Compensation & Payroll Tax Calculator

Set your salary too low and you invite an IRS reclassification and can quietly cap your QBI deduction. Set it too high and you overpay payroll tax. See the trade-off on your own numbers, using 2026 figures.

S-corp net profit available to the owner Before your W-2 salary ($, per year)

Proposed W-2 salary to yourself Your reasonable compensation ($, per year)

Filing status For the QBI income threshold

Total taxable income Household, all sources ($, per year)

Payroll (FICA) tax on your salary 12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare with no cap (employer + employee combined).

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Taken as distribution (no FICA) Profit above your salary. This is the money the S-corp structure shelters from payroll tax.

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Estimated QBI deduction allowed The 20% deduction, wage-limited for high earners to 50% of W-2 wages. Salary set too low can shrink this.

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Is your salary the number that holds up?

We set reasonable comp with comparable-role data, model QBI and payroll tax together, and file the 941 to match before July 31.

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Estimate only. A simplified illustration on the numbers you enter, using 2026 figures (Social Security wage base $184,500; QBI thresholds $553,500 MFJ / $276,750 single). It assumes a non-SSTB business and, for the QBI figure, taxable income above the threshold so the W-2 wage limit applies. It ignores the 0.9% additional Medicare tax, UBIA of property, and state taxes. This is not tax advice; reasonable compensation is a facts-and-circumstances determination. Talk to your CPA before acting.