Payroll vs. Distributions: Why Getting It Right Matters for Your Business

One of the most frequent compliance traps for S-Corporation and LLC owners is the confusion between W-2 payroll wages and owner distributions.

The IRS requires S-Corp shareholder-employees to pay themselves a 'reasonable salary' subject to payroll taxes before taking profit distributions. Taking only distributions to evade self-employment tax is one of the quickest ways to trigger an audit.

We help you determine an appropriate, defensible salary-to-distribution balance while managing automated payroll, filings, and W-2 issuance seamlessly.