Reasonable compensation for an S corporation financial advisor in Wisconsin

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

1. Training and experience
2. Duties and responsibilities
3. Time and effort devoted to the business
4. Dividend history
5. Payments to non-shareholder employees
6. Timing and manner of paying bonuses to key people
7. What comparable businesses pay for similar services
8. Compensation agreements
9. 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 We do not publish a state page when the median, or two or more percentiles, are unpublished.