Collective has secured $100M to build the future of solo business.
Read moreFree tool
Should your real estate business become an S Corp?
Closing deals as a self-employed agent? Self-employment tax is probably your biggest single expense. See what you would keep by electing S Corp status instead.
1Your commission income
Pick however you naturally think about your numbers.
2Your expenses
Brokerage split comes off the top before anything else.
Your split % (goes to the broker before it's your income)
Annual total
MLS, NAR, renewals
Zillow, Realtor.com, referral fees, paid ads
Photography, staging, signage, mailers, closing gifts
Anything else the business pays for
Vehicle & mileage
At the IRS standard mileage rate of $0.76 a mile. Your accountant will compare that against your actual vehicle costs when you file.
3S Corp salary
What you'd pay yourself as a W-2 salary. The rest becomes a distribution, which isn't hit by self-employment tax.
Wages from a job outside this business. They use up part of the Social Security wage base, so they shrink the saving.
Estimated annual self-employment tax savings as an S Corp
$9,393
Self-employment tax as a sole proprietor, less payroll tax on your S Corp salary.
As Sole Prop / LLC
$18,267
Self-employment tax
As S Corp
Lower tax$8,874
Payroll tax on your salary
Gross commission income (GCI)
$202,500
Net profit after broker split & expenses
$129,280
S Corp salary / distribution
$58,000 / $66,843
Self-employment tax as a sole prop
$18,267
Payroll tax as an S Corp
$8,874
Self-employment tax you save
$9,393
Collective runs the S Corp for you on the S Corp plan: $349 a month, or $3,560 a year billed annually. That covers payroll, filings and the extra return. It is a membership, not a tax, so it is not part of the savings above.
Don't lose your health insurance deduction
If your S Corp pays your health insurance, add the premiums to your W-2 Box 1 wages, not Box 3 or 5, then deduct them on your personal return as self-employed health insurance. Miss that step and you lose the deduction. Collective handles this as part of your payroll.
An estimate, not a tax return. This compares employment tax only: self-employment tax as a sole proprietor against payroll tax as an S Corp. It does not model federal or state income tax, the QBI deduction or retirement contributions, and it uses the single-filer threshold for the additional Medicare surtax. Talk to an accountant before making an election.
This calculator is intended solely for illustrative purposes and may not accurately reflect your unique circumstances. Collective cannot guarantee the accuracy of estimates.
Let Collective run your S Corp payroll and books
A member accountant sets your reasonable salary, files your payroll, and keeps your S Corp compliant, so the savings you see here actually show up in your bank account.