MAS Accounting & Tax · Internal Tool

Reasonable Compensation Calculator

Builds a defensible S-corp owner wage figure using the three IRS-recognized approaches. The cost approach drives the conclusion; market and income corroborate. All 592 Tampa–St. Petersburg–Clearwater MSA occupations are loaded with verified May 2025 OEWS wages. For the rare out-of-area client, type over any wage with that metro's figure. Hit New Client to start a blank file.

1 Client & Engagement

2 Cost Approach — primary basis

Break the owner's role into the hats they actually wear. Pick a comparable position from the full Tampa SOC list (wage auto-fills), set the % of time, and the tool blends a defensible figure. Percentages should total 100%. For an out-of-area client, type over the hourly wage with that metro's OEWS figure.

Role / function Comparable position (SOC) Hourly $ % time Weighted
Blended annual reasonable compensation 0% $0
Why this is the primary basis

The cost (or "many hats") approach is the method the IRS and the courts lean on most for closely held service businesses, because it values the actual functions performed rather than an abstract market title. It withstands exam scrutiny when each role is tied to a comparable wage source and the time allocation is reasonable. See Watson v. Commissioner and the IRS Job Aid on reasonable compensation.

3 Market Approach — corroboration

Pick the owner's primary comparable title. The 25th and 75th percentile band auto-fills from the May 2025 Tampa OEWS data. Override the numbers only for an out-of-area client.

4 Income Approach — advisory only

Independent-investor test: of the profit available, carve out a fair return on the owner's capital; the residual is the comp ceiling. Reliable only for capital-heavy or high-profit entities. For thin-margin service S-corps this is noise — leave blank.

5 Common MAS Client Roles quick reference

Verified May 2025 Tampa OEWS hourly means for the roles that come up most across MAS clients (trades, restaurant, landscaping, moving, professional). The full list of 592 occupations is in the role dropdowns above; this panel is just a cheat sheet. Editing a wage here overrides it everywhere for the current session.

Role labelSOC codeHourly mean $
Source: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS), May 2025 estimates, Tampa-St. Petersburg-Clearwater, FL MSA (area 45300). Wages shown are hourly mean.