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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
Self-Employment Tax Explained: Rates, Calculation, and How to Reduce It
Self-employment tax is 15.3% on net profit — on top of income tax. How SE tax is calculated, what the deductible half actually saves, and the three ways to reduce it.
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.