CA · Tax year 2026
LLC vs S-Corp in California. A localized number.
At $100,000 net profit with a $50,000 W-2 salary, the federal payroll tax delta is $7,680. Adjusted for California's $800 annual franchise/report fee, the estimated net modeled benefit (yr 1) is $6,880.
LLC Filing Fee
$70
one-time, California Secretary of State
Minimum Annual Franchise Tax
$800
statutory minimum — other CA fees not modeled
State Income Tax
Yes
ordinary rates apply · not modeled
Estimated Net Modeled Benefit (yr 1)
$6,880
federal delta minus the annual fee
01 · California model
Tune the inputs. Numbers update live.
California annual fee (deducted from savings)
$800
LLC
Federal payroll tax
$14,130
S-CORP
Federal payroll tax
$6,450
Estimated Net Modeled Benefit (yr 1)
$6,880
Federal SE tax saved (LLC vs S-Corp) minus California's $800 annual fee. The $70 filing fee is not included — it's a one-time setup cost. Income tax, QBI, health insurance, and retirement contributions are not modeled.
02 · Why California specifically
The state-level numbers that move the answer.
An S-Corp election only pencils out when the federal payroll tax saved outpaces the recurring cost of running a corporate entity. Californiacharges $800per year to keep your entity in good standing and assesses ordinary state income tax on top of the federal figure.
At the calculator's default $100K / $50K inputs, the federal delta ($7,680) is what an LLC owner gives up in self-employment tax on net profit. After the California annual fee, the estimated net modeled benefit is$6,880.
State-specific note: California imposes an $800 minimum annual franchise tax on every LLC, regardless of activity or income. Other California fees (LLC Statement of Information $20, gross-receipts fees) are not modeled.
Localized formula
// California adjusted
llcTax = netProfit × 0.9235 × 0.153
scorpTax = salary × 0.153 − 1200
savings = llcTax − scorpTax − 800- LLC filing: one-time $70 to form the entity in California.
- Minimum annual franchise tax: $800/yr (statutory minimum; other CA fees not modeled).
- State income tax: applies on top of federal ordinary rates; not modeled.