{
  "slug": "llc-vs-scorp",
  "title": "LLC vs S-Corp Tax Savings Calculator",
  "heading": "LLC vs S-Corp Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/llc-vs-scorp",
  "summary": "Self-employment tax you'd save by electing S-corp.",
  "description": "As a sole-prop LLC you pay 15.3% self-employment tax on all profit. An S-corp splits profit into salary (taxed) and distributions (not) — but you take on payroll costs.",
  "formula": "Savings = (profit − salary) × 15.3% − payroll/admin cost",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=llc-vs-scorp",
  "inputs": [
    {
      "id": "profit",
      "label": "Net business profit",
      "kind": "number",
      "hint": null,
      "default": 120000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "salary",
      "label": "Reasonable salary",
      "kind": "number",
      "hint": null,
      "default": 65000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "admin",
      "label": "Payroll + extra accounting cost",
      "kind": "number",
      "hint": null,
      "default": 2000,
      "unit": "$/yr",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "net",
      "label": "Net annual savings",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "verdict",
      "label": "Verdict",
      "format": "raw",
      "hint": null,
      "primary": false
    },
    {
      "id": "saved",
      "label": "SE tax avoided",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "dist",
      "label": "Distribution portion",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "breakeven",
      "label": "Break-even profit",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Net business profit: 120000 $",
      "Reasonable salary: 65000 $",
      "Payroll + extra accounting cost: 2000 $/yr"
    ],
    "outputs": [
      "Net annual savings: $6,415",
      "Verdict: S-corp likely saves money",
      "SE tax avoided: $8,415",
      "Distribution portion: $55,000",
      "Break-even profit: $78,072"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter net business profit ($).",
      "Enter reasonable salary ($).",
      "Enter payroll + extra accounting cost ($/yr).",
      "Read your net annual savings on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "profit": 70000,
        "salary": 40000,
        "admin": 1250
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "profit": 120000,
        "salary": 65000,
        "admin": 2000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "profit": 190000,
        "salary": 105000,
        "admin": 3250
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the llc vs s-corp calculator work?",
      "a": "As a sole-prop LLC you pay 15.3% self-employment tax on all profit. An S-corp splits profit into salary (taxed) and distributions (not) — but you take on payroll costs. The underlying maths is: Savings = (profit − salary) × 15.3% − payroll/admin cost"
    },
    {
      "q": "What do I need to enter?",
      "a": "3 values: net business profit, reasonable salary, and payroll + extra accounting cost. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the net annual savings result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — LLC vs S-Corp Tax Savings Calculator (https://www.revenuelab.fyi/toolbox/llc-vs-scorp)"
}