Frequently asked questions

Single reports and annual CPA plans are available. See the pricing page for current plan options and pricing.

Yes. There's a full sample report on the site, no email required. Same format, same data sources, same methodology documentation you'd get in yours.

If there's a data error or technical issue with your report, email help@wageproof.com. We'll fix it or refund your purchase.

Yes. You'll get prorated credit for your current plan. Unused reports do not carry over, but you can buy individual reports at $199 anytime without changing your plan. See our pricing page for details.

The calculation approaches, data sources, and documentation format are drawn directly from the IRS Reasonable Compensation Job Aid — the same guidance the IRS's own valuation professionals use. Every wage figure cites the BLS occupation code, geographic area, and data year, so an auditor can independently verify every number. The full methodology is published on this site for anyone to review. We always recommend reviewing the report with your CPA.

It's the salary an S-corp must pay its owner-employees for the work they perform. The IRS requires it to be comparable to what someone in a similar role would earn in the open market. Getting it wrong can trigger penalties, back taxes, and interest.

S-corp owners can split income between salary (subject to payroll taxes) and distributions (not subject to payroll taxes). The IRS watches for owners who pay themselves too little to avoid employment taxes. Courts have consistently ruled against owners who take large distributions while paying minimal or zero salary.

The IRS can reclassify some or all of your distributions as wages. You'd owe back payroll taxes — both the employee and employer portions, which roughly doubles the tax hit — plus interest and potentially penalties. The IRS can audit up to three years back (six if they suspect substantial underreporting).

No. The IRS has not established a fixed formula, percentage, or safe harbor. Reasonable compensation is determined based on facts and circumstances: the nature of the work, the owner's experience, geographic location, hours worked, and what comparable roles pay. That's why documentation matters.

The tool supports all three IRS-recognized approaches for reasonable compensation. The Cost Approach ("Many Hats" method) breaks your role into individual tasks and values each one using BLS wage data. The Market Approach compares your primary occupation to what that role earns in your area. The Income Approach (Independent Investor Test), available exclusively for CPA accounts, determines compensation based on the company's financial performance and a target investor return — no BLS data required. See the methodology page for full details.

All wage data comes from the Bureau of Labor Statistics Occupational Employment and Wage Statistics program. We use data at the metropolitan area level. No proprietary databases, no unverifiable adjustments.

The report calculates reasonable cash compensation (salary) based on BLS wage data. It does not separately value health insurance premiums, retirement plan contributions, or other fringe benefits. Many CPAs treat these as additions to cash compensation when setting total reasonable compensation. Discuss the treatment of benefits with your tax advisor.

We use the most recent Bureau of Labor Statistics Occupational Employment and Wage Statistics release. BLS publishes new data annually, typically in the spring for the prior May survey period. When new data becomes available, we update the tool. Your report always shows which data year was used.

Yes. Create a report, generate a questionnaire link, and send it to your client by email. They fill it out on their own (takes 10-15 minutes), and you review their answers before generating the report.

Yes. The CPA dashboard lists all your clients with their report history and questionnaire status. You can start a new report or resend a questionnaire from the same place.

Yes. Professional and Firm plans include white-label branding. Upload your logo and accent colors once, and every client report is automatically branded with your firm's identity.

You absolutely could. But with annual plans, the time savings alone make it worthwhile. The report handles the BLS data lookup, geographic fallback logic, wage adjustments, and methodology documentation. You review the inputs and deliver the report. Your clients get a documented PDF; you skip the manual data work.

BLS covers 860+ detailed occupations. The Cost Approach (Many Hats method) decomposes the owner's role into individual tasks, so even unusual businesses are covered by the combination of tasks the owner actually performs.

About 15 minutes. You walk through a short questionnaire describing the owner's role and how they spend their time. The report generates immediately after. Download the PDF whenever you need it. Finalized reports never expire; drafts are automatically finalized after 14 days.

Yes. You'll need a free account to generate and manage your reports. Creating an account is quick and free.

Yes. The tool supports reports for recent tax years using the corresponding BLS wage data. When creating a report, select the tax year from the dropdown. The report will note which BLS data year was used.

No. The tool produces a compensation analysis based on public wage data and a calculation method consistent with IRS guidance. It is not tax, legal, or financial advice. The right number depends on your specific facts and circumstances. Work with a qualified tax professional.

Your data is stored on encrypted servers hosted by Vercel and Neon (our database provider). Only you — and your CPA, if you're using the CPA workflow — can access your reports. We don't sell or share your data. We never see your tax returns, bank accounts, or financial statements. The only information we store is what you enter to generate the report.

Yes. The report generates a downloadable PDF built for exactly this. Share it with your CPA for review, attach it to your corporate minutes, or include it as supporting documentation if the IRS questions your salary. The PDF includes full source citations, a methodology explanation, and a board resolution template.

Yes. Each owner-employee gets their own report based on their specific role, hours, and experience level. If two owners split duties differently, their reasonable compensation figures will reflect that. Create a separate report for each owner.