Reasonable compensation for an S corporation restaurant manager
BLS Occupational Employment and Wage Statistics, May 2025 survey. SOC 11-9051, Food Service Managers.
Food service managers in the US earn a median of $69,390 a year in wages, according to BLS. The middle half earn between $56,870 and $86,800. Those figures are a starting point for an owner’s reasonable salary, adjusted for the owner’s actual duties, hours and experience.
United States wage distribution
- 10th percentile
- $45,960$22.09
- 25th percentile
- $56,870$27.34
- Median
- $69,390$33.36
- 75th percentile
- $86,800$41.73
- 90th percentile
- $107,640$51.75
- Employed in the US
- 238,430
- Survey period
- May 2025
- States with data
- 51 of 51
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.
By state
| State | Median | vs US | Employed |
|---|---|---|---|
| Alabama | $63,010 | 9.2% lower | 4,330 |
| Alaska | $82,030 | 18.2% higher | 380 |
| Arizona | $70,180 | 1.1% higher | 3,400 |
| Arkansas | $55,120 | 20.6% lower | 2,720 |
| California | $78,260 | 12.8% higher | 33,180 |
| Colorado | $79,870 | 15.1% higher | 2,440 |
| Connecticut | $77,990 | 12.4% higher | 1,520 |
| Delaware | $74,430 | 7.3% higher | 770 |
| District of Columbia | $81,680 | 17.7% higher | 1,000 |
| Florida | $72,790 | 4.9% higher | 18,500 |
| Georgia | $65,280 | 5.9% lower | 9,230 |
| Hawaii | $87,800 | 26.5% higher | 1,230 |
| Idaho | $70,140 | 1.1% higher | 670 |
| Illinois | $63,930 | 7.9% lower | 11,270 |
| Indiana | $71,430 | 2.9% higher | 4,990 |
| Iowa | $66,700 | 3.9% lower | 1,760 |
| Kansas | $70,320 | 1.3% higher | 1,540 |
| Kentucky | $70,410 | 1.5% higher | 1,680 |
| Louisiana | $61,400 | 11.5% lower | 1,950 |
| Maine | $70,510 | 1.6% higher | 1,210 |
| Maryland | $72,850 | 5.0% higher | — |
| Massachusetts | $92,240 | 32.9% higher | 4,310 |
| Michigan | $60,790 | 12.4% lower | 9,240 |
| Minnesota | $79,820 | 15.0% higher | 730 |
| Mississippi | $59,540 | 14.2% lower | 1,920 |
| Missouri | $65,520 | 5.6% lower | 1,600 |
| Montana | $72,140 | 4.0% higher | 950 |
| Nebraska | $60,450 | 12.9% lower | 2,050 |
| Nevada | $65,320 | 5.9% lower | 4,310 |
| New Hampshire | $77,360 | 11.5% higher | 590 |
| New Jersey | $78,020 | 12.4% higher | 6,360 |
| New Mexico | $65,210 | 6.0% lower | 1,410 |
| New York | $84,200 | 21.3% higher | 8,000 |
| North Carolina | $74,080 | 6.8% higher | 9,420 |
| North Dakota | $72,210 | 4.1% higher | 950 |
| Ohio | $62,980 | 9.2% lower | 8,570 |
| Oklahoma | $63,840 | 8.0% lower | 2,020 |
| Oregon | $62,110 | 10.5% lower | 4,420 |
| Pennsylvania | $64,750 | 6.7% lower | 10,530 |
| Rhode Island | $82,850 | 19.4% higher | 760 |
| South Carolina | $66,190 | 4.6% lower | 5,080 |
| South Dakota | $60,640 | 12.6% lower | 1,270 |
| Tennessee | $64,410 | 7.2% lower | 4,550 |
| Texas | $60,770 | 12.4% lower | 25,990 |
| Utah | $69,480 | 0.1% higher | 2,400 |
| Vermont | $77,910 | 12.3% higher | 500 |
| Virginia | $71,230 | 2.7% higher | 3,820 |
| Washington | $95,190 | 37.2% higher | 1,180 |
| West Virginia | $54,800 | 21.0% lower | 1,230 |
| Wisconsin | $61,810 | 10.9% lower | 6,000 |
| Wyoming | $62,610 | 9.8% lower | 590 |
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.