Every S-corp owner is required to pay themselves a "reasonable salary" before taking any distributions. The IRS doesn't hand you a formula for it. It's judged after the fact, based on what someone doing your job, at your level of skill, would reasonably be paid. That vagueness is exactly why it's the single most common thing the IRS looks at when it examines an S-corp return.
What actually goes into the number
A defensible salary usually accounts for what comparable roles pay in your industry and area, how many hours you're actually putting in, what you'd have to pay someone else to do your job, and how the rest of the business's profit is being used. None of that is static. A business that's grown, added employees, or changed what the owner actually spends their time on should probably see the salary number move too.
Where owners get caught
The two most common mistakes are opposite problems: setting salary too low to minimize payroll tax, which draws exactly the kind of attention that leads to an audit adjustment, or leaving an old number in place for years without ever checking whether it still reflects reality.
Neither one requires malice. It's usually just that nobody revisited it after the year it was first set.
If it's been more than a year or two since anyone looked at your salary number against what your business actually looks like now, have that conversation before your next payroll run.
This post is general information, not specific tax, accounting, or legal advice. Your situation may differ, so talk to us before acting on anything here.