Last updated: July 14, 2026
Illinois S-corp savings calculator
Enter your annual net self-employment income (after business expenses).
$
Self-employment tax as a sole prop / LLC$16,955
FICA on your S-corp salary (60% = $72,000)$11,016
Distributions (SE-tax-free)Not subject to FICA/SE tax$48,000
Federal SE-tax saved$5,939
Payroll + tax-prep admin−$2,500
IL S-corp tax (1.50%, min $75)−$637
Net IL S-corp savings / year$2,802
At $120,000 of net SE income, electing S-corp status pencils out in Illinois — it tends to pay off only between roughly $58,000 and $288,000 of net SE income — above that, the 1.50% IL entity tax outgrows the SE-tax savings.
Estimate for planning — federal SE tax + Illinois S-corp/franchise cost only; confirm reasonable-compensation with a CPA before electing.
The rules
Illinois self-employment & S-corp rules
- State income tax: up to 4.95%. Self-employment tax itself (15.3%) is federal and identical in every state.
- IL S-corp tax: Illinois levies a 1.5% Personal Property Replacement Tax on S-corp net income, which offsets part of the federal SE-tax savings.
- PTET (SALT-cap workaround): Available — the pass-through entity tax election lets the business deduct state tax federally, bypassing the SALT cap on that income (the $40,400 2026 cap phases down toward $10,000 above $505,000 of MAGI, where PTET helps most).
Questions
Frequently asked questions
How much self-employment tax will I pay in Illinois?▾
Self-employment tax is federal — 15.3% (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) on 92.35% of your net self-employment income, the same in Illinois as everywhere. Illinois then taxes that same income at its state income-tax rate (up to 4.95%). The calculator above shows your SE tax at any income.
Is an S-corp worth it for a Illinois freelancer or LLC owner?▾
Sometimes — it depends on your income. In Illinois, it tends to pay off only between roughly $58,000 and $288,000 of net SE income — above that, the 1.50% IL entity tax outgrows the SE-tax savings. Check the calculator above for your specific number.
Does Illinois tax S-corps differently?▾
Illinois levies a 1.5% Personal Property Replacement Tax on S-corp net income, which offsets part of the federal SE-tax savings.
Does Illinois have a PTET (SALT-cap workaround)?▾
Yes. Illinois offers a pass-through entity tax (PTET) election that lets the business pay state income tax and deduct it federally, bypassing the federal SALT cap on that income. The cap is $40,400 for 2026 but phases down toward $10,000 above ~$505,000 of MAGI, so PTET matters most for higher earners. If you elect S-corp, this often stacks on top of the SE-tax savings.
How is my "reasonable salary" set for an S-corp?▾
The IRS requires S-corp owner-employees to pay themselves a reasonable salary (subject to FICA) before taking distributions. This calculator assumes 60% salary / 40% distributions as an illustration — your actual reasonable compensation depends on your role and industry and should be set with a CPA.