Many S corporations have multiple shareholders, and several are husband and wife teams. In these cases, we determine a starting point as a collective and then massage from there. For example, using our example above with the $42,000 salary. Perhaps one spouse should be paid $30,000 and the other spouse be paid $12,000 commensurate to his and / or her individual worth to the business. In other words, don’t double the salary once you determine your starting point because you have two shareholders. The starting point is for all aggregated shareholders, and from there you can divvy it up, massage it, increase it, etc.
Remember, this would only be for active shareholders. Please recall from an earlier chapter that you could have your spouse be an inactive investor in your S corporation at 20% and you would remain at 80%. As we’ve mentioned previously, one of the reasonable salary tests is the relationship between salary and shareholder distributions. Therefore, if you own 80% of a business taxed as an S corporation, you are receiving 80% of the distributions. Subsequently, your salary could be possibly reduced (but your salary is still ultimately dependent on you and your value to the business).
Here is a table assuming a 35% jumping off point for salary with a column at 100% ownership and 80% ownership to further explain-
To reiterate, the $100,000 line above would 100,000 x 80% x 35% = 28,000 resulting in a payroll tax savings of $1,071. Note that is a savings of payroll taxes, and not income taxes since the 80% and the 20% would flow presumably onto a jointly filed individual tax return.
Taxpayer's Comprehensive Guide to LLCs and S Corps : 2019 Edition