Reasonable compensation calculator
Split your working week across the duties you actually perform, and the calculator prices each one at the local market wage for that work. The result is a salary range you can discuss with your CPA.
How it works
- Each duty is priced at the hourly wage for the closest occupation in your area.
- Hours per week × weeks worked gives the annual cost of hiring someone for that work.
- The total is shown at the 25th percentile, median and 75th percentile of local pay.
Wage data: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025.
Where should we send your salary report?
Your results appear as soon as you submit. A member of our client services team may call to walk you through them; there is no obligation.
Your estimated reasonable salary
Use this salary in the S corporation calculator
A planning estimate, not a formal compensation study. Market wages are for employees and do not reflect your experience, credentials or the size of your business, which can justify pay above or below the median.
Need a salary you can defend?
We prepare documented reasonable compensation studies for S corporation owners and fold them into payroll and tax planning.
Common questions
What is reasonable compensation?
If you own an S corporation and work in it, the IRS expects the corporation to pay you a salary before it pays you distributions. The salary should be comparable to what the business would pay someone else to do the same work, considering your duties, time and local pay.
Why split my time across duties?
Most owners wear several hats. An hour spent doing the books is worth less in the job market than an hour spent running the company or doing licensed professional work. Pricing each duty at its local market wage is a common, well-documented way to support a salary figure.
Where do the wage figures come from?
From the U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics, May 2025 release, for the Colorado metro area you choose. The tool shows the 25th percentile, median and 75th percentile hourly wage for each occupation.
Is this a formal wage study?
It is a planning estimate. A formal reasonable compensation study also documents your training, experience, the size of the business and what you are paid by others, and is written to support the figure if the IRS asks. We prepare those for clients.
Let’s talk about your business
An introductory call with our client services team covers your needs, the scope of work and fit. Advice begins once an engagement is in place.