United States S Corporation tax calculator 2026
An S corporation is a federal pass-through: profits are taxed at your personal 2026 rates (10%, 12%, 22%, 24%, 32%, 35%, 37%), but FICA of 15.3% applies only to a reasonable salary (modeled at 60% of profit). The remaining ~40% taken as distributions is FICA-exempt, and a 20% QBI deduction may apply.
This calculator estimates the total 2026 U.S. federal tax on S corporation profits by splitting a reasonable salary from distributions, applying FICA and the QBI deduction, and running the balance through the personal income tax brackets.
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Result
United States S Corporation tax rates 2026
| Band or item | Rate |
|---|---|
| Up to US$11,925 | 10% |
| US$11,925 to US$48,475 | 12% |
| US$48,475 to US$103,350 | 22% |
| US$103,350 to US$197,300 | 24% |
| US$197,300 to US$250,525 | 32% |
| US$250,525 to US$626,350 | 35% |
| Over US$626,350 | 37% |
| Self-employment tax (Social Security + Medicare) | 15.3% |
| QBI deduction (max) | 20% |
Source: www.irs.gov
How is an S corporation taxed in 2026?
An S corporation is a pass-through entity: it pays no federal corporate income tax itself. Instead, the profit flows to the owner's personal Form 1040 and is taxed at the 2026 federal ordinary income brackets, which run 10% up to $11,925, 12% up to $48,475, 22% up to $103,350, 24% up to $197,300, 32% up to $250,525, 35% up to $626,350, and 37% above that.
The core reason owners elect S corporation status is payroll tax. The IRS requires that a working shareholder take a reasonable salary (this model estimates it at 60% of net profit). Only that salary is subject to FICA; the rest of the profit, taken as distributions, is completely FICA-exempt. That is the structural saving versus a sole proprietor, who pays self-employment tax on all profit.
FICA on the reasonable salary and the QBI deduction
FICA totals 15.3% of the reasonable salary, made up of 12.4% Social Security and 2.9% Medicare. In an S corporation the company and shareholder split this on paper, but the owner economically bears the full 15.3% on the salary portion. Because distributions carry no FICA, moving profit from salary to distributions is where the tax savings come from, which is exactly why the salary must be defensible and not artificially low.
On top of that, the Qualified Business Income (QBI) deduction lets eligible owners deduct up to 20% of their qualified pass-through income before applying the income tax brackets. QBI applies to the profit that passes through on the K-1, not to W-2 wages, so it further lowers the federal income tax on the distribution portion.
Worked example: $100,000 of S corp profit
Take a single-filer owner with $100,000 of net profit.
- Reasonable salary (60%): $60,000 → FICA 15.3% = $9,180.
- Distributions (40%): $40,000, FICA-exempt, saving 15.3% × $40,000 = $6,120 versus a sole proprietor.
- QBI deduction: 20% × $40,000 pass-through income = $8,000, so taxable income is about $100,000 − $8,000 = $92,000 (before any standard deduction).
Federal income tax on $92,000: 10% of $11,925 ($1,192.50) + 12% of $36,550 ($4,386) + 22% of $43,525 ($9,575.50) = $15,154. Adding FICA of $9,180 gives a total federal burden of roughly $24,334. These figures are an approximation and ignore state tax and personal deductions.
Frequently asked questions
How much tax does a US S corporation owner pay?
There is no federal corporate income tax; profit passes through and is taxed at personal rates from 10% to 37%. FICA of 15.3% applies only to the reasonable salary (modeled at 60% of profit). On $100,000 of profit a single owner pays roughly $24,334 in federal tax ($15,154 income tax plus $9,180 FICA).
What is a reasonable salary for an S corp?
The IRS requires a working shareholder to take a reasonable salary before distributions. This calculator models it at 60% of net profit, so on $100,000 of profit the salary is $60,000 and $40,000 is taken as FICA-exempt distributions.
Do S corp distributions pay FICA?
No. Distributions are exempt from the 15.3% FICA tax. Only the reasonable salary is subject to FICA (12.4% Social Security plus 2.9% Medicare), which is the main tax advantage of an S corporation over a sole proprietorship.
What is the QBI deduction for an S corp?
The Qualified Business Income deduction lets eligible owners deduct up to 20% of their pass-through profit before income tax. On $40,000 of qualified distributions that is an $8,000 deduction, lowering taxable income.
How is FICA calculated on an S corp salary?
FICA is 15.3% of the reasonable salary: 12.4% Social Security plus 2.9% Medicare. On a $60,000 salary that equals $9,180. Distributions above the salary are not subject to FICA.
What are the 2026 federal income tax brackets for an S corp owner?
Pass-through profit is taxed at single-filer rates of 10% up to $11,925, 12% up to $48,475, 22% up to $103,350, 24% up to $197,300, 32% up to $250,525, 35% up to $626,350, and 37% above $626,350.
Official sources
- Internal Revenue Service (IRS) — Corporate & personal income tax