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Transcript
the reason why S corporation owners have to take a reasonable salary is because payroll taxes which includes Social Security and Medicare taxes are apply to this salary unlike many LLC owners es Corps owners are not considered to be self-employed instead they are considered to be employed by the corporation therefore they don't have to pay self-employment taxes like LLC owners do the self-employment tax is a wiing 15.3% and it's your Social Security and Medicare taxes as a result it can be very cumbersome as a business owner to deal with this so if you're an S corporation owner you're not subject to self-employment taxes but you will have to pay payroll taxes on the salary that you pay yourself