TaxMax Enterprise - The 1% EngineS-Corp Salary Calculator - Find Your Minimum Defensible Salary
The single biggest lever for owners clearing $250k: stop paying 15.3% self-employment tax on every dollar of profit.
As a sole proprietor or single-member LLC, every dollar of net profit carries self-employment tax — 15.3% on top of your income tax. An S-Corp election splits that same income into two lanes: a reasonable salary you run through payroll, and distributions that carry no self-employment tax at all. On a $300k profit with a $90k defensible salary, that difference compounds to tens of thousands of dollars every year.
The catch is the word “defensible.” Set the salary too low and the IRS reclassifies your distributions as wages, with penalties and back payroll tax attached. There is no fixed number in the code — the standard is what comparable businesses in your industry and region actually pay. That is exactly what the calculator computes: a minimum defensible salary benchmarked by industry and metro, then stress-tested against audit-risk bands before you commit to the election.
The TaxMax engine prices the split live — move the salary slider and watch self-employment tax, payroll cost, and audit risk re-price instantly, with the compliance floor stated on every configuration. Analysis only; your CPA signs the election.