Sample Reasonable Compensation Report — See what you get.
This is a real report generated by the tool. Same format, same data sources, same methodology documentation you'll get in yours.
White-labeled PDFs replace the WageProof brand with your firm’s logo and colors — available on Professional and Firm plans.
What is a reasonable compensation report?
A reasonable compensation reportis a written analysis that documents a defensible salary for an S-corporation owner-employee. It matches the owner’s actual duties to market wage data from the BLS Occupational Employment and Wage Statistics program and shows the work, so the number can be supported if the IRS questions it.
S-corp owners are required to pay themselves reasonable compensation for the work they do before taking tax-advantaged distributions. A reasonable compensation report is how you set that figure on evidence rather than a guess — and how you keep the contemporaneous documentation an examiner will credit. The sample below is a real report, page by page.
Executive Summary
The bottom-line number, prominently displayed with the approach used and data sources identified.
Two donut charts showing how time spent on each task compares to compensation earned from each task.
Clear labeling of the Cost Approach methodology and BLS OEWS data year.
Cost Approach Detail
Every task links to a specific Standard Occupational Classification code with its full title.
Experience rating (1-5) maps to a specific BLS wage percentile (10th through 90th).
The math is visible: hours worked x hourly rate = annual wage contribution for each task.
Methodology & Sources
Full table showing how each experience level translates to a BLS wage percentile.
The Employment Cost Index adjustment that brings BLS survey data forward to the report's tax year.
Citations to the IRS Reasonable Compensation Job Aid, David E. Watson, P.C. v. United States, and other key authorities.
Board Resolution
Template language adapts for Corporation vs. LLC, with the correct officer titles and resolution format.
Print, sign, and file with your corporate minutes. No additional drafting needed.
Reasonable compensation report FAQ
A reasonable compensation report is a written analysis that documents a defensible salary for an S-corporation owner-employee. It matches the owner's actual duties to market wage data — the BLS Occupational Employment and Wage Statistics program is the one most commonly used — and shows the methodology so the figure can be supported if the IRS questions it.
What reasonable compensation means →A WageProof report has four parts: an executive summary with the bottom-line salary figure, an approach detail that maps each task to a BLS occupation code and wage percentile, a methodology-and-sources section so every number is traceable, and a ready-to-sign board resolution you can file with your corporate records. The annotated sample on this page walks through each one.
Any S-corporation owner who works in the business and takes distributions should be able to support their salary, and the CPAs, EAs, and tax advisors who advise them use these reports to set payroll and build an audit file. It's most valuable as contemporaneous documentation — prepared when you set the salary, not after an audit notice arrives.
WageProof charges a flat fee per report — no subscription is required to generate a single report. Professional and Firm plans for tax pros add white-labeling and volume pricing. See the pricing page for current tiers.
See pricing →The report documents a transparent methodology, ties every wage figure to a published BLS source, and includes a board resolution — exactly the contemporaneous, data-backed record examiners look for. Reasonable compensation is a facts-and-circumstances determination, so no report can guarantee an audit outcome, but a documented, market-based analysis is far stronger than an unsupported number. It is not a substitute for advice from your own tax professional.
How the calculation works →Download the full sample. Or generate yours.
All 10 pages, no email required. Two versions available — standard and white-labeled for tax and accounting firms.