Compare total tax burden between C-Corp and S-Corp structures based on your business income and personal tax rate.
estimated annual tax savings
| C-Corp Corporate Tax (21%) | $42,000 |
| C-Corp Dividend Tax | $37,604 |
| C-Corp Total Tax | $79,604 |
| S-Corp Payroll Tax | $6,120 |
| S-Corp Pass-Through Income Tax | $46,531 |
| S-Corp Total Tax | $52,651 |
⚠️ Consult a CPA before choosing your entity. State taxes and other factors apply.
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C-Corp Tax: Net Income × 21% + Dividends × 23.8%
S-Corp Tax: Salary × 7.65% (payroll) + Income × personal rate
C-Corps face double taxation: the corporation pays 21% federal tax on profits, then shareholders pay tax again on dividends. S-Corps pass income directly to shareholders, avoiding corporate-level tax.
Small businesses with fewer than 100 shareholders who want pass-through taxation and to avoid double taxation. Also useful when owners take a salary to reduce self-employment tax.
Companies seeking venture capital, planning to go public, or retaining profits in the business. C-Corps allow unlimited shareholders and multiple share classes.
Yes. S-Corp owners pay themselves a reasonable salary (subject to payroll tax) and take remaining profits as distributions, which are not subject to self-employment tax.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.