IRS-Compliant S-Corp Salary Calculator

Protect your business from IRS audits. Use the "Many Hats" cost method to determine a defensible salary for 2026.

Your 2026 Salary Estimate

Enter your business roles and time allocation below.

The "Many Hats" Method

The IRS doesn't use a '60/40' rule. They look at what you actually do. Our tool breaks your day into specific roles (Admin, CEO, Sales) and calculates a weighted average based on US Bureau of Labor Statistics (BLS) data. This is the same method used by top CPAs to justify compensation during an audit


The High Cost of Getting it Wrong

20% Penalty: The standard IRS accuracy penalty for underpayment.Back Taxes: 15.3% self-employment tax on every reclassified dollar.Interest: Accumulated interest on unpaid taxes from previous years.Closing Sentence: A 'reasonable' salary isn't just a number; it's a legal defense.


FAQ

Question 1: "Is the 60/40 rule safe?"Answer: No. The IRS has explicitly stated there is no "fixed percentage" rule.Question 2: "What if my business makes no profit?"Answer: If there is no income to distribute, the salary requirement may be waived, but consult a pro.Question 3: "How often should I update this?"Answer: Annually, or whenever your business roles change significantly.


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Terms of Service


This tool provides estimates only and does not constitute official tax advice.



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S-Corp Salary Estimator

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