How to Pay Yourself as a Solo S-Corp Lawyer: Step-by-Step

As a solo attorney operating as an S-corporation (S-corp), you pay yourself a reasonable salary for the services you perform and can take profits as distributions. The salary has to be real, documented, and reasonable. The IRS examines the reasonable compensation requirement when reviewing owner compensation in an S-corp.

With SurePayroll® By Paychex, single-owner S-corps and small teams run payroll from setup through quarterly filings and year-end forms.

Why S-corp attorneys must pay themselves a W-2 salary

As an active owner-employee of an S-corp, the IRS requires you to pay yourself reasonable compensation for the services you perform. You pay that salary through a documented payroll process.

In an S-corporation, you pay income taxes and FICA taxes on your W-2 wages. A sole proprietor pays self-employment tax on all business profit instead. Distributions are not subject to payroll taxes; instead you report them on your income tax return. That tax treatment is central to the S-corp structure, which is why your salary must hold up to IRS scrutiny.

When the IRS reviews an S-corp and finds that distributions should have been wages, it can assess back taxes plus penalties and interest. Disproportionately low salaries relative to distributions are among the factors the IRS weighs when reviewing owner-employee compensation, whether the practice is structured as a PLLC or a professional corporation with an S-corp election. Your next step is establishing what reasonable means for your specific practice.

How to set your reasonable compensation as an attorney

You set reasonable compensation at what the market pays a comparable attorney with similar training and experience, duties, and practice area. The answer varies by practice area, geography, and the volume of work you perform for your law firm.

Among the IRS factors anchoring the documentation: your duties and responsibilities, comparable salaries for those services in your market, and the profitability of your law firm. A law firm generating $600,000 in revenue would be expected to show a higher salary for its attorney-owner than one billing $150,000.

The Bureau of Labor Statistics Occupational Outlook Handbook (May 2025) reports national wages for lawyers as follows.

Reasonable compensation for a solo practitioner in a lower-cost market doing general civil work could land well below the median; a transactional attorney in a major city may exceed it. The BLS data gives you an external benchmark. A law practice organized as a PLLC or professional corporation can elect S-corp status with the IRS; a law partnership cannot make that election as an entity.

Salary and distributions work together: your S-corp pays you a reasonable salary as an active owner-employee, with payroll taxes withheld and remitted, and can also pay shareholder distributions to you as an owner, reported on IRS Schedule K-1.

A CPA or tax advisor can confirm your salary figure, flag potential tax savings, and support broader tax planning. The IRS reviews facts and circumstances, and the BLS data is a reference point, not a guide.

What to have in place before your first payroll run

Here's what you need to have in place before you run your first payroll.

Keep documentation of every payroll run, including pay stubs, tax deposit confirmations, and quarterly filings, as part of your bookkeeping records.

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Choose how you'll run S-corp payroll

You can run S-corp payroll yourself, work with an accountant or payroll professional, or use payroll software. Each approach comes with different levels of support, automation, and oversight.

Running payroll yourself

Running payroll yourself gives you full control and may mean lower upfront costs. It also means handling payroll tax calculations, payroll tax deposits, payroll tax filings, recordkeeping, and year-end forms yourself.

Working with an accountant or payroll professional

Working with an accountant or payroll professional can be a good fit if you want hands-on help managing payroll compliance requirements. The tradeoff is typically a higher cost, and you may still need to gather payroll information and coordinate each payroll run.

Using payroll software

Using payroll software gives you an established system for payroll processing, managing employee records, calculating withholdings, and supporting payroll tax reporting requirements.

How to run your first payroll as a solo attorney S-corp

Move from setup to an executed payroll in four steps.

Here's an estimate on how the payroll calculations break down at a $95,000 annual salary on a monthly schedule. State taxes and your W-4 settings vary.

The Social Security wage base for 2026 is $184,500. At a $95,000 salary, you pay the full 6.2% on every dollar for the year. Once your salary crosses $184,500 in a calendar year, the 6.2% Social Security withholding stops; the 1.45% Medicare portion has no wage cap.

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Your ongoing payroll obligations as an attorney S-corp owner

As an active owner-employee, you're responsible for payroll tax deposits and filings when you run payroll. Here is what repeats each year.

SurePayroll calculates, files, and deposits federal, state, and local payroll taxes, including Form 941 and your W-2.

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Run your S-corp payroll yourself or with payroll software

If you run payroll once a month, you follow a fixed cadence: 12 pay runs, 12 deposits, four quarterly returns, and a year-end close, every year.

SurePayroll calculates payroll taxes on each run, files your federal, state, and local payroll taxes, and generates your W-2 at year end.

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