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Dwayne B.
Dwayne B., Attorney
Category: Legal
Satisfied Customers: 33370
Experience:  Began practicing law in 1992
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I have an S Corp, can my s corp pay me as a contractor and

Customer Question

I have an S Corp, can my s corp pay me as a contractor and not as an employee. Is that legal? Meaning no employee taxes are involved. If it is not legal, is it possible to create a separate entity to receive payments from my main business s Corp?
Submitted: 1 year ago.
Category: Legal
Expert:  Dwayne B. replied 1 year ago.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts.

Your S corp can pay you as a contractor if you meet the requirements of the IRS to be considered an independent contractor. The general information about that is at

The main reason you don't wan to "play games" with how you pay yourself is that it is one of the signs that lawyers will use to "pierce the corporate shield" if you ever get sued.

You could form a separate company that your original company could hire and pay, as opposed to hiring you individually as a contractor or employee, but then you have the same problem with the other company. You may consider meeting with a local lawyer and examining other business entities such as partnerships or family partnerships which can create a less favorable tax and liability situation but a more favorable situation regarding employee v. independent contractor. I suggest meeting with a local lawyer because that way they can examine your business in detail, which we can't do on here, and create an attorney client relationship when discussing possible ways to get creative with tax situations.