S-Corp Changes | Part 2: Paying Yourself

Published October 27, 2026

An S-corp can save you money—but your salary needs more thought than “I heard 50% was fine.” In Part 2 of this week’s Owner’s Office Hours, we’re talking about reasonable compensation: what it means, the consequences of paying yourself too little, and how paying more than necessary can reduce potential savings. I also cover compensation studies, payroll processing fees, a separate business tax return, and the cash you need available when payroll runs. Paying taxes throughout the year can mean less left to pay at filing. But you still need to plan for income tax on the remaining business profit. If you haven’t watched Part 1, check it out for home office reimbursements, accountable plans, and owner health insurance. This is general educational information, not individualized tax advice. Reasonable compensation and overall tax results depend on your circumstances. A compensation study supports your salary decision but doesn’t guarantee IRS acceptance.

This content is for general educational purposes. Tax and financial decisions depend on your circumstances. Contact Account For Data for guidance specific to your business.