Delaware franchise tax calculator

Delaware LLC franchise tax: simple

• Amount: $300 per year, flat.
• When: Due June 1 each year.
• How: Pay online at corp.delaware.gov.
• Annual report: None required (LLCs do not file annual reports).

Whether your LLC has $0 revenue or $10M revenue, the franchise tax is the same $300. This is one of the reasons Delaware LLC ownership cost stays predictable.

Delaware Corporation franchise tax: pick the lower

Corporations are calculated by two methods; you pay the lower of the two. Plus an annual report fee ($50).

Method 1: Authorized Shares

• 5,000 shares or fewer: $175 minimum tax
• 5,001-10,000 shares: $250
• 10,001+ shares: $250 plus $85 per additional 10,000 shares
• Maximum tax under this method: $200,000

Method 2: Assumed Par Value Capital

Formula:

1. Divide total gross assets by total issued shares to get assumed par value per share.
2. Multiply assumed par value by total authorized shares to get assumed capital.
3. Tax = $400 per $1M of assumed capital, with $400 minimum.
4. Maximum tax: $200,000 (or $250,000 for large corporate filers).

Most startups with high authorized share counts (e.g., 10 million authorized) but low assets have a much lower tax under Method 2. Always calculate both and pay the lower.

Worked examples

Example 1: Delaware LLC, any size

Tax: $300/year flat. No annual report. Due June 1.

Example 2: Delaware C-Corp with 10 million authorized shares, $50K assets, 1 million issued

Method 1 (Authorized Shares): 10,000,000 shares = $250 base + $85 × 999 = ~$85,000. Way too high.
Method 2 (Assumed Par Value Capital): $50,000 / 1,000,000 = $0.05 par value. $0.05 × 10,000,000 = $500,000 assumed capital. $400 per $1M = $200 minimum tax = $400.
Pay $400 + $50 annual report = $450 total.

Example 3: Delaware C-Corp with 10 million authorized shares, $5M assets, 1 million issued

Method 1: still $85,000.
Method 2: $5,000,000 / 1,000,000 = $5 par value. $5 × 10,000,000 = $50,000,000 assumed capital. $400 × 50 = $20,000.
Pay $20,000 + $50 annual report. The growth in assets pushed the tax up significantly. Many growing startups see this jump unexpectedly.

How to pay

1. Visit Delaware Division of Corporations at corp.delaware.gov.
2. Enter your LLC name or file number to look up your account.
3. Pay by credit card or ACH.
4. Save the payment confirmation; you may need it for good-standing certificates.

Common LLC franchise tax mistakes

• Confusing franchise tax with income tax (LLC owes $300 franchise tax even with no income).
• Missing the June 1 deadline (different from corporate March 1 deadline).
• Letting registered agent lapse before franchise tax payment (registered agent often pays on your behalf).
• Not realizing two consecutive years unpaid triggers state cancellation.

Related resources

• Delaware franchise tax pillar guide
• Glossary entry
• Late fee estimator (blog)

What does this Delaware franchise tax calculator actually compute?

This calculator turns the two Delaware franchise tax rules into a single answer for the entity you actually run. For a Delaware LLC the math is short because the state charges a flat $300 each year no matter how much money the company makes or loses. The calculator confirms that figure so you do not waste an afternoon second guessing whether revenue, members, or assets change it. They do not. For a Delaware corporation the calculator runs both legal methods, the Authorized Shares method and the Assumed Par Value Capital method, and reports the lower of the two because Delaware lets you pay whichever produces the smaller bill. That single design choice is where most of the value sits, since the gap between the two methods can be tens of thousands of dollars for a startup that authorized 10 million shares.

The tool matters because the franchise tax is separate from income tax and is owed even when the company earned nothing. A non-resident founder who formed an entity to hold a software product, a brand, or a future raise still owes franchise tax on the schedule below. Knowing the number in advance lets you set aside cash, line up the payment before the deadline, and avoid the $200 late penalty plus 1.5% monthly interest that Delaware adds the moment you miss the date. The calculator is a planning instrument first and a confirmation tool second. Use it when you are deciding how many shares to authorize, when you are budgeting for the year, and again right before you pay so the figure you submit matches the figure Delaware expects.

How do I read each input the corporate calculator asks for?

The corporate side of the calculator asks for three numbers, and each one maps to a line on your Delaware filing. Total authorized shares is the ceiling of shares your certificate of incorporation permits the company to issue, not the number you have handed out. Total issued shares is the number actually held by founders, investors, and option holders as of the tax year end. Total gross assets is the figure reported on your federal Form 1120 Schedule L, which is usually total assets at year end. Mixing up authorized and issued is the single most common input error, and it pushes the Authorized Shares method to a wildly wrong number.

• Total authorized shares: the maximum allowed by your charter, drives Method 1 and the par value step of Method 2.
• Total issued shares: shares actually outstanding, used as the denominator when deriving assumed par value per share.
• Total gross assets: from Form 1120 Schedule L, drives the assumed capital in Method 2.
• Entity type: selecting LLC short circuits everything to the flat $300, while corporation runs both methods.

Read the inputs in that order before you trust the output. If you are an LLC, the only input that matters is the entity type, and the rest of the fields are irrelevant to your $300 bill. If you are a corporation, fill all three numbers from your year end records rather than from memory, because a rounding habit on gross assets can move the Assumed Par Value Capital result by hundreds of dollars. When the inputs come straight from your charter and your tax return, the calculator output will match what Delaware independently recalculates, and you avoid a notice asking for a corrected payment later in the year.

How do I read the output number the calculator returns?

For an LLC the output is $300 and nothing else, because Delaware does not require an annual report from an LLC and does not scale the tax by size. For a corporation the output has two parts you should look at together. The first part is the franchise tax itself, which is the lower of the two method results. The second part is the $50 annual report fee that every Delaware corporation owes on top of the tax. The total you actually wire to Delaware is the lower method result plus that $50. A founder who reads only the tax line and forgets the report fee will underpay by exactly $50 and then receive a balance due notice.

The output also tells you which method won, and that is worth reading because it explains how to lower the bill next year. If the Authorized Shares method produced a huge figure and the Assumed Par Value Capital method won, your high authorized share count is harmless this year but could become expensive as gross assets grow. If the two methods are close, you are near the point where rising assets will push the assumed par value method above the authorized shares ceiling. Treat the winning method as a signal about your share structure rather than a one time result. Many founders reauthorize their share count or revisit par value after seeing the calculator flag a method flip, because the difference between $400 and $20,000 traces directly back to choices made on the day of incorporation.

What does a non-resident founder with a single member LLC actually pay?

A non-resident founder who formed a single member Delaware LLC to run a consulting practice, a SaaS product, or an agency pays $300 in franchise tax per year, full stop. The state does not look at where the founder lives, where the customers are, or whether the LLC turned a profit. It does not ask for an annual report, and it does not scale the tax by revenue or asset size. That predictability is exactly why the flat LLC structure suits founders who cannot easily predict their first year revenue. The $300 is due June 1, and the founder pays it online at corp.delaware.gov using a card or ACH transfer from a US business account such as Mercury, Wise, Relay, Lili, or Payoneer.

The franchise tax is not the only obligation this founder carries, and the calculator only covers the franchise piece. A foreign owned single member LLC must also file Form 5472 attached to a pro forma Form 1120 with the IRS each year, and missing that filing carries a $25,000 penalty that dwarfs the franchise tax. The founder also needs an EIN, which is free directly from the IRS by submitting Form SS-4 and typically arrives in about 8 to 10 business days for an applicant without a Social Security number. None of those federal items change the $300 franchise figure, but they belong on the same calendar. Use the calculator to lock in the state number, then keep a separate reminder for the federal forms so a small state tax never hides a far larger federal exposure.

How does the Authorized Shares method work step by step?

The Authorized Shares method counts only the ceiling of shares your charter permits, and it ignores assets entirely. If your corporation authorized 5,000 shares or fewer, the tax is the $175 minimum. From 5,001 to 10,000 authorized shares the tax is $250. Above 10,000 shares Delaware adds $85 for every additional 10,000 shares or part thereof on top of the $250 base. The method caps at $200,000. The structure means the tax rises in steps as you authorize more shares, which is why a corporation that authorized 10 million shares lands at roughly $85,000 under this method before any other rule is applied.

• 5,000 shares or fewer: $175 minimum tax.
• 5,001 to 10,000 shares: $250.
• 10,001 shares and up: $250 plus $85 per additional 10,000 shares.
• Hard cap under this method: $200,000.

Walk through a 10 million share example to see why this method rarely wins for startups. Start with the $250 base for the first 10,000 shares. The remaining 9,990,000 shares divide into 999 blocks of 10,000, and each block adds $85, which is roughly $84,915. Add the base and you reach about $85,165. Almost no early stage company has the assets to justify that figure, so the Assumed Par Value Capital method almost always produces a smaller number. The Authorized Shares method exists mainly as a simple default and as the rule that applies when a corporation kept its authorized count low. If you intend to authorize millions of shares for option pools, expect this method to look frightening and expect the other method to be the one you actually pay.

How does the Assumed Par Value Capital method work step by step?

The Assumed Par Value Capital method ties the tax to assets rather than to the raw share ceiling, which is why high growth companies eventually feel it. First divide total gross assets by total issued shares to get an assumed par value per share. Second multiply that assumed par value by total authorized shares to get assumed capital. Third apply $400 for every $1 million of assumed capital, with a $400 minimum. The method caps at $200,000, or $250,000 for large corporate filers. The denominator being issued shares rather than authorized shares is the quiet lever here, because issuing more shares lowers the assumed par value and therefore the tax.

1. Assumed par value per share = total gross assets divided by total issued shares.
2. Assumed capital = assumed par value per share multiplied by total authorized shares.
3. Tax = $400 for each $1 million of assumed capital, with a $400 floor.
4. Cap = $200,000, or $250,000 for large corporate filers.

Run the same 10 million authorized share company with $50,000 of gross assets and 1 million issued shares. Dividing $50,000 by 1,000,000 gives an assumed par value of $0.05 per share. Multiplying $0.05 by 10,000,000 authorized shares gives $500,000 of assumed capital. Since that is below $1 million, the tax falls to the $400 minimum. The corporation pays $400 plus the $50 annual report for $450 total, instead of the $85,165 the Authorized Shares method demanded. This is the result most startups want, and it is the entire reason the calculator runs both methods rather than trusting the first one. As gross assets climb after a funding round, the assumed par value rises, assumed capital rises, and this once tiny tax can jump into five figures.

Why does the franchise tax matter even when my company earned nothing?

Founders routinely assume a year with no revenue means no Delaware bill, and that assumption causes most of the late penalties the state collects. Franchise tax is a fee for the privilege of existing as a Delaware entity, not a tax on profit. An LLC that never opened a bank account still owes $300 on June 1. A corporation that raised money but has not shipped a product still owes the greater of its two method results plus the $50 annual report. The calculator helps here by separating the franchise question from the income question, so you stop waiting for a profitable year before budgeting for the tax. The obligation starts the year you form the entity and repeats every year the entity stays on Delaware records.

The cost of treating the franchise tax as optional compounds quickly. A missed LLC payment turns $300 into $300 plus a $200 penalty plus 1.5% monthly interest on the unpaid balance. Two consecutive unpaid years move the entity toward state level cancellation, after which the company loses good standing and cannot easily get the certificates that banks, investors, and payment processors request. For a non-resident founder, losing good standing is especially painful because reviving a cancelled entity from abroad is slower and more expensive than the original $300 would ever have been. Run the calculator once a year, set the result aside in your operating account, and pay before June 1 so a flat fee never snowballs into a standing problem.

What are the common mistakes this calculator helps you avoid?

The mistakes cluster around confusing one rule for another. Founders mix up franchise tax with income tax and skip payment in a loss year. They confuse the LLC June 1 deadline with the corporate March 1 deadline and pay the corporate side a quarter late. They enter authorized shares where the calculator wants issued shares, or the reverse, and walk away with a number that has no relationship to their real bill. They forget the $50 annual report fee on the corporate side and underpay. Each of these is cheap to fix before filing and expensive to fix after a notice arrives, which is why reading every input label carefully is worth the extra minute.

• Treating a no income year as a no tax year, when the $300 LLC fee is always due.
• Applying the corporate March 1 deadline to an LLC that actually owes on June 1.
• Swapping authorized and issued shares in the corporate inputs.
• Omitting the $50 corporate annual report fee from the total.
• Assuming a registered agent paid the tax when the agent only forwarded a reminder.

A subtler mistake is leaning on a registered agent without confirming what they actually do. Many agents forward the Delaware reminder and offer to pay on your behalf, but only if you fund the payment and authorize it in time. If your agent relationship lapsed, or if you assumed an included service that was actually an add on, the reminder may never reach you and the tax goes unpaid. The calculator cannot send your money, but it can make sure you know the exact figure your agent or you must submit. Pair the calculated number with a personal calendar reminder rather than relying solely on a third party so the payment happens whether or not the forwarding email arrives.

What edge cases change the corporate number the calculator shows?

Several edge cases bend the corporate result, and the calculator surfaces them through the inputs rather than hiding them. A corporation with a very high authorized share count but modest assets will see Method 1 balloon and Method 2 stay small, so the winning method is Assumed Par Value Capital. A corporation that issued only a tiny fraction of its authorized shares pushes its assumed par value up, because issued shares sit in the denominator of that calculation, which can make Method 2 larger than founders expect. Large corporate filers face a higher $250,000 cap instead of the usual $200,000, which only matters for the largest balance sheets but is built into the rule. Each edge case traces back to a charter decision or a balance sheet figure you can verify.

Timing creates its own edge cases. Gross assets are measured at year end, so a funding round that closes in December raises the assumed capital for that entire tax year even though the cash arrived late. Authorizing additional shares mid year changes the Authorized Shares result for the year in which the amendment takes effect. Converting from an LLC to a corporation, or the reverse, swaps you between the flat $300 world and the two method world, and the calculator will produce very different numbers depending on which entity type you select. When you sit near a method crossover or a cap threshold, run the calculator with both your current figures and your projected year end figures so the December number does not surprise you. Treat any large asset change as a reason to recompute rather than reusing last year's result.

How do I use the calculated result to actually pay and stay in good standing?

Once the calculator gives you a number, paying is a short online process. Visit the Delaware Division of Corporations at corp.delaware.gov and look up your account by entity name or file number. Enter the franchise tax amount, add the $50 annual report fee if you are a corporation, and pay by card or ACH. For a non-resident founder, the ACH or card can come from a US business account at Mercury, Wise, Relay, Lili, or Payoneer, which keeps the payment tied to the business rather than a personal account. Save the confirmation, because banks and investors often ask for proof of franchise tax payment when they request a certificate of good standing later.

After paying, fold the result into a yearly routine so you never start from zero again. Note the exact figure and the method that won for a corporation, keep the payment confirmation with your formation documents, and set a reminder for the next June 1 or March 1 deadline that applies to your entity type. If your authorized shares, issued shares, or gross assets shifted during the year, rerun the calculator before the deadline rather than copying last year's number. The franchise tax is a small, predictable cost when handled on schedule, and the whole point of running this calculator is to keep it that way. A founder who computes the number, pays before the deadline, and files the federal Form 5472 separately has handled the Delaware obligations that most often trip up first time owners.

How does franchise tax fit alongside the other costs of a Delaware entity?

The franchise tax is one recurring line in a small set of Delaware costs, and seeing the whole set helps you decide whether the structure fits your plan. Formation itself runs $110 to the state for the certificate. A common one time setup package sits at $297 for founders who want the formation, registered agent, and supporting steps handled together. The EIN from the IRS is free when you submit Form SS-4 yourself, and it usually arrives in about 8 to 10 business days for an applicant without a Social Security number. The franchise tax then recurs at $300 a year for an LLC, or at the calculated corporate figure plus the $50 annual report for a corporation. Mapping these out keeps the annual $300 in proportion rather than treating it as a surprise.

Two more items round out the picture for non-resident owners, and neither changes the franchise figure the calculator returns. A US formed LLC is exempt from the FinCEN beneficial ownership information report under the interim final rule issued March 26 2025, so domestic single member LLCs do not file that report. The federal Form 5472 attached to a pro forma Form 1120 remains required for foreign owned single member LLCs, with a $25,000 penalty for missing it. Knowing which obligations apply and which do not lets you budget accurately and avoid paying for filings you do not owe while never skipping the ones you do. Run the franchise calculator for the state number, keep the federal forms on a separate line, and the total annual cost of a Delaware entity becomes a short, predictable list rather than a source of anxiety.