I have a client who owns an S-corp which shares 50% with his partner. They both draw salaries and know that the salaries need to be equal. However, they think it's the NET pay that needs to be equal, not the gross wages. Right now, the gross salaries are off and I want to correct this. I have been searching for information on this so I can set them strait.

Can you tell me which is correct and where I can find this information so I can send it to them?