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What is self-employment tax actually costing you?
As a sole prop or single-member LLC, 15.3% self-employment tax applies to your full net profit. An S-corp election lets you pay FICA on a salary only — not on every dollar. See the numbers for your income.
2026 rates · Illustrative estimate · Not tax advice
SE tax calculator
See exactly what self-employment tax is costing you.
As a sole prop or single-member LLC, 15.3% SE tax applies to your full net profit. An S-corp election lets you pay FICA only on a W-2 salary — saving the difference. Enter your numbers to see how much that is for you.
Your numbers
What this calculates
SE tax on your full net profit vs. FICA on a reasonable W-2 salary only. The difference is your potential annual savings from an S-corp election. Payroll overhead (~$1,200/yr) is already subtracted from the net figure.
Today — sole prop / LLC
$14,130
14.1% of net profit
S-corp election
$6,120
FICA on $40,000 salary only
Estimated annual savings
$6,810/year
At $100,000 in net profit, an S-corp election saves roughly $6,810/year after estimated payroll costs. The savings compound — at this profit level, every year without the election is money left on the table.
The bottom line
The S-corp election is a payroll structure change, not a legal entity change for an LLC — you file Form 2553, set up payroll, pay yourself a W-2 salary, and take the rest as distributions. The mechanics take a few weeks. The savings start immediately. Use the S-Corp Salary Calculator to find the right salary number before your CPA sets it up.
Illustrative estimates only. Uses 2026 SE tax rates and SS wage base ($184,500). Reasonable compensation estimated at 40% of net profit, minimum $40,000. Payroll overhead estimated at $1,200/year. Does not model income tax, QBI deduction, or state taxes. Does not constitute tax or legal advice. Confirm structure decisions with your CPA.
Also read
The Solo Service Pro's Tax Strategy Guide
SE tax break-even analysis, deductions most solo pros miss, the S-corp question answered with actual math, and a quarterly routine that eliminates April surprises.
Read Planning guideThe Solo Owner's Deductions and Tax Strategy Guide
The S-corp doesn't apply yet — but that doesn't mean there's nothing to do. QBI deduction, Solo 401(k), home office, vehicle, and SE health insurance — with calculators built in.
Read S-corp planningHow to Actually Elect S-Corp Status: Form 2553, Deadlines, and What Happens Next
The calculator said it's worth it. Now what? A step-by-step guide to filing Form 2553, the March 15 deadline, late election relief, and what to set up in the first month as an S-corp.
Read S-corp planningLLC vs S-Corp: Which Business Structure Is Right for You?
An LLC is a legal structure; an S-corp is a tax election — and most S-corp owners have both. When the S-corp election saves money, when it doesn't, and what the compliance costs actually are.
ReadWork with Matt
Ready to build a plan?
Matt Reese, CPA works with solo service providers and freelancers to evaluate whether the S-corp election makes sense, set a defensible salary, and get payroll set up correctly.
Tax services provided through Matt Reese, CPA. This page is educational and does not constitute tax or investment advice.