S-Corp Payroll Setup & Salary Planning
The whole point of an S-Corp is splitting your income into W-2 salary (subject to payroll taxes) and owner distributions (not subject to self-employment tax). But the IRS requires the salary to be "reasonable" — and getting that number wrong triggers audits. Here's how to get it right.
Reasonable Salary Calculator
⚠ This estimate uses median industry salary ratios and does not account for your specific qualifications, local market rates, or state taxes. The IRS "reasonable compensation" standard requires your salary to reflect what you'd pay an employee to do your job. Always consult a CPA before setting your salary — underpaying yourself is the #1 S-Corp audit trigger.
Monthly Payroll Schedule Template
Bi-Weekly Payroll Checklist (Sample — Q1)
Concierge Tier Includes Full TemplateThe Concierge Bundle ($3,497) includes a complete 12-month payroll schedule, pre-filled with your salary, payroll processor setup, and quarterly tax deposit reminders configured for your state.
Unlock Full Template →Quarterly Tax Deadline Calendar
The Reasonable Salary Audit Risk
The IRS specifically targets S-Corps where owners pay themselves unusually low salaries to maximize distributions. If your W-2 salary is less than 40% of total S-Corp income, you're at elevated audit risk. The safe harbor: document a salary that matches what a qualified employee would earn doing your role in your market. Your CPA should have this on file. Our Professional Setup tier ($1,997) includes CPA coordination to determine your defensible salary from day one.