Reasonable compensation for S corporation owners
BLS Occupational Employment and Wage Statistics, May 2025 survey.
Wage data for the 50 occupations S corporation owners most often hold, for the US and for each state where BLS publishes enough of it. Pick the occupation closest to what the owner actually does; each page shows the 10th to 90th percentile wages, hourly and annual, and how many people hold that job.
Health care
- Dentists$170,95047 states
- Family medicine physicians$244,18051 states
- General internal medicine physicians$256,56044 states
- Pediatricians$210,04049 states
- Psychiatrists$281,87046 states
- Physicians (all other specialties)$265,93050 states
- Optometrists$136,57051 states
- Pharmacists$140,91051 states
- Physical therapists$102,76051 states
- Occupational therapists$100,33051 states
- Speech-language pathologists$97,87051 states
- Chiropractors$79,20048 states
- Veterinarians$130,10049 states
- Nurse practitioners$132,30051 states
- Physician assistants$135,88051 states
- Podiatrists$160,30041 states
- Clinical and counseling psychologists$100,58048 states
- Mental health counselors$59,35051 states
- Massage therapists$58,45050 states
- Medical and health services managers$123,86051 states
Professional services
- Lawyers$159,67051 states
- Accountants and auditors$83,68051 states
- Tax preparers$54,92048 states
- Personal financial advisors$105,07049 states
- Management analysts and consultants$101,86051 states
- Architects$99,28051 states
- Civil engineers$100,84051 states
- Software developers$135,98050 states
- Graphic designers$62,96051 states
- Interior designers$67,19049 states
Sales and real estate
Management
Trades
Personal services
Figures shown are US medians. State counts include the District of Columbia.
How to use these numbers
The IRS expects S corporation shareholders who work in the business to take a reasonable salary before taking distributions. There is no single formula. Courts and the IRS look at what the business would pay someone else to do the same work.
Market wage data like this is one of the strongest pieces of support, as long as it matches the owner’s real role. An owner who also runs the business full time may justify a figure above the median; one who works part of the week may justify less.
Factors courts consider
- Training and experience
- Duties and responsibilities
- Time and effort devoted to the business
- Dividend history
- Payments to non-shareholder employees
- Timing and manner of paying bonuses to key people
- What comparable businesses pay for similar services
- Compensation agreements
- The use of a formula to determine compensation
Source: IRS Fact Sheet 2008-25, Wage Compensation for S Corporation Officers.
About this data
These figures are the May 2025 estimates from the Occupational Employment and Wage Statistics (OEWS) program of the U.S. Bureau of Labor Statistics. OEWS surveys employers rather than individuals and covers wage and salary workers, so it does not include self-employed owners. Wages are straight-time gross pay, including commissions and production bonuses but not overtime premiums or employer-paid benefits. Annual wages are hourly wages multiplied by 2,080 hours.
A percentile wage is the pay below which that share of workers falls: a quarter of workers earn less than the 25th percentile. BLS does not publish an estimate when too few employers responded or it does not meet BLS quality standards. Where a wage is at or above the highest figure BLS publishes for the survey, we show that cap followed by “or more”. We do not publish a state page when the median, or two or more percentiles, are unpublished.
This page summarizes published government wage data. It is not a reasonable compensation study or tax advice for any specific taxpayer. Wages exclude benefits and self-employment income. Data: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025.