S-Corp Salary vs. Shareholder Distribution Calculator (Reasonable Salary Method)

Common S Corp Salary/Distribution splits:

60% salary/40% distribution or

50% business income paid in salary/50% Distribution

The following formula is used to calculate a reasonable salary:

Reasonable Salary Method = (Experience x Industry Average Salary)/Hours Worked Per Week

See Also: U.S Bureau of Labor Statistics

See Also: Salary Calculator from Calculator.net

See Also: IRS Paying Yourself

See Also: IRS Non-Profits

See Also: Budget Allocation Averages

See Also: Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations

See Also: Topic no. 404, Dividends

Reasonable Salary Method