DE · Tax year 2026 · Last reviewed 2026-08-24
LLC vs S Corp in Delaware: Tax Savings Calculator.
Compare federal payroll taxes, self-employment taxes, Delaware ’s $400 annual fee and estimated S Corp savings in seconds.
At $100,000 net profit with a $50,000 W-2 salary, the federal payroll tax delta is $10,305. Adjusted for Delaware's recurring cost, the estimated net modeled benefit (yr 1) is$8,705.
LLC Filing Fee
$90
one-time, Delaware Secretary of State
Annual Franchise / Report (LLC)
$400
recurring, every year
S-Corp Recurring Cost
$400
same as the LLC rate
Estimated Net Modeled Benefit (yr 1)
$8,705
federal delta minus the annual fee
01 · Delaware model
Tune the inputs. Numbers update live.
What does this mean? Your expected business profit for the year after business expenses but before the owner's salary.
The IRS requires "reasonable compensation" for S-Corp shareholder-employees. The salary is capped at your current net profit.
This is an illustrative assumption, not a tax or an IRS-required amount. Real overhead depends on your payroll provider, your CPA, and your state.
Per IRS Form 8959, these are added to your business income to determine whether the 0.9% Additional Medicare Tax applies.
Sets the Form 8959 threshold: $200K (single / HOH), $250K (MFJ), $125K (MFS).
Delaware LLC recurring fee (deducted from savings)
$400
Recurring state filing/maintenance fee.
Defaults: $100K profit · $50K salary
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LLC
Federal payroll tax
$14,130
S-CORP
Federal payroll tax
$3,825
Federal Payroll / SE Tax Difference
$10,305
LLC SE tax minus the S-Corp's employer-side FICA on the owner salary. This is the federal payroll-tax piece only.
Estimated Net Modeled Benefit (yr 1)
$8,705
- Federal payroll-tax delta
- $10,305
- − Delaware annual fee
- $9,905
- − Modeled S-Corp admin overhead
- $1,200
- = Estimated net modeled benefit
- $8,705
- − Approx. §199A W-2 drag
- $0
- = Net after QBI drag
- $8,705
Federal delta = the LLC's self-employment tax minus the S-Corp's employer-side payroll tax. The S-Corp employer-side figure ishalf of the standard 12.4% + 2.9% FICA on the salary; the 0.9% Additional Medicare Tax is entirely employee-side (no employer match) and is not included in the S-Corp employer-side comparison. The $90 filing fee is not included — it's a one-time setup cost. Income tax, QBI, health insurance, and retirement contributions are not modeled.
Estimate. Methodology & scope
ESTIMATE. The figures above estimate the federal payroll / self-employment tax difference between a Single-Member LLC (Schedule C / Schedule SE) and an S-Corp election, plus Delaware's $400 LLC annual franchise / report fee and the $400 modeled S-Corp recurring cost and the one-time $90 Delaware LLC filing fee (setup cost, not deducted from the year-1 net benefit). They do not include federal or Delaware individual income tax (the state-income-tax flag is informational; the dollar amount is not modeled), the §199A QBI deduction (made permanent under the One Big Beautiful Bill Act, H.R. 1 / Public Law 119-21, signed July 4, 2025, with a 2026 phase-in range of $200K–$275K single / $400K–$550K MFJ), self-employed health insurance, retirement contributions, the half-of-SE-tax Schedule 1 adjustment, filing-status-specific deductions or credits, multi-state apportionment, reasonable-compensation enforcement, or other items that depend on your complete tax situation. The S-Corp administration overhead is a configurable illustrative assumption (defaulted to $1,200/yr), not a tax and not an IRS-required amount. Verify with a licensed CPA, EA, or tax attorney before acting.
02 · Why Delaware 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. Delawarecharges $400per 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 ($10,305) is what an LLC owner gives up in self-employment tax on net profit. After the Delaware annual fee, the estimated net modeled benefit is$8,705.
State-specific note: Delaware's $400 annual LLC franchise tax (6 Del. C. § 18-1107, as amended by HB 400 effective 1/1/2026; raised from $300) is assessed on all LLCs registered in Delaware. Delaware does not have a state individual income tax, but its franchise tax applies regardless of the owner's residence. The flat $400 method is used in this calculator; the Authorized Shares method (~$450 max for typical LLCs with assumed $1 par value) is the alternative.
Localized formula — how this number was calculated
// Delaware — same engine as the homepage
seBase = netProfit × 0.9235
ssPortion = min(seBase, 184_500) × 0.124
medicare = seBase × 0.029
addlMed = max(0, seBase + existingWages − 200_000) × 0.009
llcTax = ssPortion + medicare + addlMed
// S-Corp — employer-side payroll tax only
ssPortion = min(salary, 184_500) × 0.124
medicare = salary × 0.029
standard = ssPortion + medicare
addlMed = max(0, salary + existingWages − 200_000) × 0.009
// employee-side only — no employer match
scorpTax = standard / 2 // 50% of standard FICA — AddlMed excluded
// Net benefit
payrollDelta = llcTax − scorpTax
netOfFee = max(0, payrollDelta − 400)
savings = max(0, netOfFee − 1200) // $1,200 admin overhead- LLC filing: one-time $90 to form the entity in Delaware.
- Annual franchise / report: $400/yr to maintain good standing.
- State income tax: applies on top of federal ordinary rates; not modeled.
03 · FAQ
LLC vs S Corp in Delaware — frequently asked questions
Common questions about choosing between an LLC and S Corp in Delaware, sourced from Google, Reddit, and Quora. The right answer depends on your income, reasonable compensation, and other factors — talk to a CPA for personal advice.
How much does it cost to form an LLC in Delaware?
Delaware charges a $90 filing fee to form an LLC. The annual franchise tax is $400 (raised from $300 effective January 1, 2026 by HB 400).
Does Delaware have a state income tax?
Delaware does not have a state individual income tax on income earned outside of Delaware. However, the $400 annual franchise tax applies to all LLCs registered in Delaware regardless of where the owner lives.
Is an S Corp election worth it in Delaware?
The $400 annual franchise tax is the same for both LLCs and S-Corps in Delaware. The S-Corp election still provides federal payroll tax savings of $5,500–$6,000 at $100K profit. The net benefit remains strong once profit exceeds $60K–$80K.
What is Delaware's LLC franchise tax?
Delaware charges a flat $400 annual franchise tax on all LLCs registered in the state, regardless of whether the LLC does business in Delaware. This was raised from $300 effective January 1, 2026.
Why do so many companies incorporate in Delaware?
Delaware has a well-developed business court system (Court of Chancery), flexible LLC laws, and no income tax on out-of-state income. However, the $400 annual franchise tax applies regardless, and if you operate in another state, you'll also need to register as a foreign LLC there.
04 · Compare against
Run the model against another state.
05 · Methodology