I was looking into S-Corp structures. In California, S-Corps are taxed at a 1.5% rate on their net income. What I couldn't figure out is if this 1.5% rate applies to the income of the S-Corp after paying the employee.
For example, if the S-Corp and its owner and sole employee make 225k per year and the S-Corp pays its employee 125k per year and has no other expenses. Is the California tax on the full 225k or the 100k remaining?
A reference along with the answer would be useful, thanks.