An independent S-Corp calculator, built to be honest about the math.

Who runs this

scorpbreakeven.com is published by Red Goggles LLC, an independent operator of free web calculators and reference tools. We are not a CPA firm, a payroll company, a law firm, a tax-preparation service, or affiliated with the IRS or any state taxing authority. We don't file your return, we don't sell payroll services, and we don't collect leads — the calculator runs on your device and nothing you type is sent to us.

Why this site exists

Most S-Corp calculators online produce a single number — "you'd save $X" — and stop there. That framing hides the more useful question: at your income, salary, and state, does the self-employment-tax saving actually clear the added overhead of running an S-Corp? This tool shows the break-even threshold explicitly, so you can see whether you're comfortably above it, hovering near it, or below it — and it's built to say "not worth it" plainly when the numbers say so.

How it's calculated

The estimate is grounded in published federal rules, applied in the open:

• Self-employment vs. payroll tax. Sole proprietors and default LLCs pay 15.3% SE tax (12.4% Social Security up to the wage base, 2.9% Medicare) on net income; an S-Corp applies payroll tax only to your reasonable W-2 salary, with distributions above it escaping that tax. The tool models the Social Security wage base and your other W-2 wages so it doesn't overstate savings.
• Reasonable compensation. The IRS standard (Treas. Reg. §1.162-7, reinforced by Watson v. Commissioner) — what a similar role would pay someone who wasn't the owner. See our reasonable-comp section.
• The Section 199A QBI deduction. S-Corp salary is not qualified business income; distributions are — and for a Specified Service Trade or Business (SSTB) above the income threshold, electing S-Corp can wipe out a QBI deduction worth more than the SE-tax saving. The tool models all three cases (see the QBI wrinkle).
• Added overhead. Payroll service, 1120-S tax prep, registered agent, and state-level LLC/S-Corp fees — the real costs that determine break-even.

The full method is spelled out on the calculator page under How it works, Reasonable comp, and the QBI wrinkle.

How we stay accurate and current

We build from the Internal Revenue Code, Treasury regulations, and published state Department of Revenue rules, and we cite primary sources — the IRS Form 2553 instructions, the QBI deduction guidance, and IRS reasonable-compensation guidance — so you can verify the figures yourself. Reasonable-comp benchmarking services such as RCReports and BizStats are linked for owners who want a defensible salary figure. Thresholds and state rules change annually; we date our figures to the current tax year and update as new ones publish.

How the site is funded

scorpbreakeven.com is free and supported by display advertising. Ads are kept calm and never mix with your inputs — see our privacy page for exactly what is and isn't collected.

Questions or corrections? On a topic where a wrong number costs real money, accuracy matters to us — reach us on the contact page.