Concrete and Masonry Business: LLC vs. S-Corp Tax Comparison

By Yarik Yarosh, CPA ·September 5, 2026 ·4 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Concrete and masonry work is physically demanding, equipment-intensive, and carries some of the highest workers’ compensation rates in construction. Flatwork (driveways, patios, sidewalks), foundations, retaining walls, and decorative concrete all generate good revenue, but the tax picture is shaped by workers’ comp costs on the owner’s salary and equipment depreciation on trucks, mixers, and forms. For tax purposes, concrete and masonry isn’t a specified service trade or business (SSTB) under IRC 199A.

✓Key takeaway

Concrete/masonry tax structure:

SSTB status: NOT an SSTB. The QBI deduction has no income-based phase-out.

Workers’ compensation classification:

Concrete work (NCCI code 5213): rates vary by state, typically 10-20% of payroll
Masonry (NCCI code 5022): rates vary, typically 8-15% of payroll
The owner’s salary in an S-Corp is subject to workers’ comp at these rates
This is the critical cost that determines whether the S-Corp saves money

S-Corp break-even for concrete/masonry:

Workers’ comp at 15%: break-even around $100,000-$120,000 net income
Workers’ comp at 10%: break-even around $80,000-$90,000 net income
Workers’ comp at 20%+: break-even around $130,000+ net income
Many concrete contractors report the break-even is higher than they expected because of the workers’ comp burden

Equipment that drives the tax picture:

Concrete mixer truck: $80,000-$200,000 (Section 179)
Dump truck: $40,000-$100,000 (Section 179)
Skid steer/loader: $30,000-$70,000 (Section 179)
Power trowels, screeds, vibrators: $500-$5,000 each
Concrete forms (steel/aluminum): $5,000-$20,000
Stamping/texturing tools: $2,000-$10,000

Seasonality: concrete and masonry work is highly seasonal in northern climates. Revenue concentrates in April through November, with December through March generating 10-20% of annual revenue. This affects estimated tax planning.

How does the S-Corp analysis work for a concrete contractor?

Hypothetical example

Round numbers. A sole proprietor concrete contractor (flatwork: driveways, patios, sidewalks). Net profit: $130,000. Single filer. Workers’ comp rate: 15% (concrete work classification).

As sole proprietorship:

SE tax: $130,000 x 92.35% x 15.3% = $18,355
QBI deduction: $130,000 x 20% = $26,000
Taxable income: $130,000 - $9,178 - $15,000 - $26,000 = $79,822
Income tax: approximately $12,500
Total tax: $30,855

As S-Corp (reasonable salary: $60,000):

FICA on salary: $9,180 (employee + employer)
Workers’ comp on owner salary: $60,000 x 15% = $9,000
Distribution: $130,000 - $60,000 - $9,000 = $61,000
FICA on distribution: $0
QBI: $61,000 x 20% = $12,200
Taxable income: $55,000 + $61,000 - $15,000 - $12,200 = $88,800
Income tax: approximately $14,500
S-Corp admin: $1,500
Total tax + costs: $34,180

S-Corp is MORE EXPENSIVE by $3,325/year at this income level and workers’ comp rate.

The S-Corp costs more because the 15% workers’ comp on the $60,000 salary ($9,000) exceeds the FICA savings on the distribution ($18,355 - $9,180 = $9,175). Add the $1,500 admin cost, and the S-Corp nets negative.

At what income does the S-Corp break even? Setting FICA savings = workers’ comp + admin:

FICA savings: approximately 15.3% x (net profit - salary) x 92.35%
Workers’ comp cost: salary x 15%
Admin cost: $1,500

At $170,000 net profit, salary $60,000:

FICA savings: approximately $15,500
Workers’ comp: $9,000
Admin: $1,500
Net savings: $5,000

Break-even is approximately $130,000-$140,000 net profit with 15% workers’ comp.

With lower workers’ comp (10%): At $130,000 net, salary $60,000:

Workers’ comp: $6,000
FICA savings: $9,175
Admin: $1,500
Net savings: $1,675

The workers’ comp rate is the single most important variable for concrete/masonry S-Corp decisions. Get a real quote before making the election.

Equipment purchase year analysis: If the contractor buys a mixer truck ($120,000) and takes Section 179:

Net profit before equipment: $130,000
Section 179: $120,000
Net profit after 179: $10,000
SE tax: $1,407
The S-Corp would still require the reasonable salary (~$60,000) plus workers’ comp, even though net income is only $10,000
In equipment purchase years, the sole proprietorship is clearly better (lower mandatory costs)

For concrete contractors who buy major equipment every 3-5 years, the S-Corp may only save money in the non-purchase years.

Illustrative numbers only, not a real client and not advice for your facts.

Related guides:

Want this checked against your own situation?

Start with a Diagnostic: a CPA licensed in the US and Canada reads your file and tells you in writing what's wrong and how to fix it, three to four business days after you finish the questions. The report is $250. If you hire us for any work after that, you get the $250 back as a discount on that work. Or send us your return or your letter and get a fixed price, free.

Start a Diagnostic →See prices

Get a fixed price, free

Get the next cross-border guide by email

One or two plain-English guides a week on US-Canada tax. No spam, unsubscribe anytime.

Cite this page

Yarik Yarosh, CPA. "Concrete and Masonry Business: LLC vs. S-Corp Tax Comparison." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/concrete-masonry-entity-structure-scorp

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.