A tool to help determine the appropriate salary for S corporation owners based on industry, location, and company profits.

Tax law requires S corporations to pay shareholder-employees reasonable compensation. The S corporation reasonable compensation calculator below estimates that number based on Bureau of Labor Statistics data, what a S corporation pays other employees, and what distributions and wages a shareholder receives. Additional information about the calculator appears beneath the calculator.
Shareholder Distributions:
Shareholder Salary :
Highest Paid Non-Shareholder Employee Salary:
Closest Occupation :
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Operators, and TendersCutters and Trimmers, HandCutting and Slicing Machine Setters, Operators, and TendersExtruding, Forming, Pressing, and Compacting Machine Setters, Operators, and TendersFurnace, Kiln, Oven, Drier, and Kettle Operators and TendersInspectors, Testers, Sorters, Samplers, and WeighersJewelers and Precious Stone and Metal WorkersDental Laboratory TechniciansMedical Appliance TechniciansOphthalmic Laboratory TechniciansPackaging and Filling Machine Operators and TendersPainting, Coating, and Decorating WorkersCoating, Painting, and Spraying Machine Setters, Operators, and TendersSemiconductor Processing TechniciansPhotographic Process Workers and Processing Machine OperatorsComputer Numerically Controlled Tool OperatorsComputer Numerically Controlled Tool ProgrammersAdhesive Bonding Machine Operators and TendersCleaning, Washing, and Metal Pickling Equipment Operators and TendersCooling and Freezing Equipment Operators and TendersEtchers and EngraversMolders, Shapers, and Casters, Except Metal and PlasticPaper Goods Machine Setters, Operators, and TendersTire BuildersHelpers–Production WorkersProduction Workers, All OtherAircraft Cargo Handling SupervisorsFirst-Line Supervisors Transportation and Material Moving Workers, Except Aircraft Cargo HandlingAirline Pilots, Copilots, and Flight EngineersCommercial PilotsAir Traffic ControllersAirfield Operations SpecialistsFlight AttendantsAmbulance Drivers and Attendants, Except Emergency Medical TechniciansDriver/Sales WorkersHeavy and Tractor-Trailer Truck DriversLight Truck DriversBus Drivers, SchoolBus Drivers, Transit and IntercityShuttle Drivers and ChauffeursTaxi DriversMotor Vehicle Operators, All OtherLocomotive EngineersRail Yard Engineers, Dinkey Operators, and HostlersRailroad Brake, Signal, and Switch Operators and Locomotive FirersRailroad Conductors and YardmastersSubway and Streetcar OperatorsRail Transportation Workers, All OtherSailors and Marine OilersCaptains, Mates, and Pilots of Water VesselsMotorboat OperatorsShip EngineersBridge and Lock TendersParking AttendantsAutomotive and Watercraft Service AttendantsAircraft Service AttendantsTraffic TechniciansTransportation InspectorsPassenger AttendantsTransportation Workers, All OtherConveyor Operators and TendersCrane and Tower OperatorsDredge OperatorsHoist and Winch OperatorsIndustrial Truck and Tractor OperatorsCleaners of Vehicles and EquipmentLaborers and Freight, Stock, and Material Movers, HandMachine Feeders and OffbearersPackers and Packagers, HandStockers and Order FillersGas Compressor and Gas Pumping Station OperatorsPump Operators, Except Wellhead PumpersWellhead PumpersRefuse and Recyclable Material CollectorsTank Car, Truck, and Ship LoadersMaterial Moving Workers, All Other
Calculate Salaries
Additional Information and Instructions
The S corporation reasonable compensation calculator suggests possible S corporation salary amounts based on shareholder distributions, shareholder wages, the highest paid nonshareholder’s wages, and the Bureau of Labor Statistics data for the job.
The distributions a shareholder-employee receives matter for a simple reason. The Internal Revenue Service can reclassify distributions as wages if an S corporation pays unreasonably low wages to a shareholder-employee.
The amount the highest non-shareholder-employee earns also matters. In most situations, a shareholder-employee would need to be paid more than a non-shareholder employee.
The calculator also considers the most up-to-date Bureau of Labor Statistics annual wages data for more than 800 occupations. More specifically, if available, the calculator grabs the 10th, 25th, 50th, 75th and 90th percentile annual wage amounts. The data used in this version of the calculator reflects May 2023 annual wages which means roughly two years of inflation have occurred since the data were collected. Thus, S corporation shareholder should inflate appropriately the amounts shown here by roughly five percent.
Understanding the S Corporation Reasonable Compensation Amounts
The S corporation reasonable compensation calculator estimates three amounts.

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