BLS OEWS Update: What It Means for 2026 Reasonable Compensation
How the latest BLS Occupational Employment and Wage Statistics release affects reasonable compensation analysis for S-corps, including updated SOC mapping, adjustment guardrails, and annual refresh best practices.
Each year, the Bureau of Labor Statistics publishes updated wage data through its Occupational Employment and Wage Statistics (OEWS) program. For CPAs preparing reasonable compensation analyses, this release is one of the most important annual events on the calendar. The data directly affects the benchmarks used to support S-corp shareholder salaries, and falling behind on updates can weaken your defensibility in front of the IRS.
This article explains what the latest OEWS release includes, what changed, and how to incorporate updated data into your practice.
What Is the OEWS Release?
The OEWS program is a semiannual survey of employers conducted by the BLS in partnership with state workforce agencies. The results are published annually and provide wage estimates for more than 800 occupations across every state and metropolitan statistical area (MSA) in the United States.
Each occupation's data includes annual and hourly wage percentiles at the 10th, 25th, 50th (median), 75th, and 90th levels. These percentile breakdowns allow practitioners to place a shareholder within a defensible range rather than relying on a single average figure.
For reasonable compensation purposes, the OEWS release is significant because it comes from a neutral federal agency, is publicly available at no cost, and covers virtually every occupation a shareholder might perform. For a deeper explanation of how BLS data works in practice, see our guide on how BLS wage data supports reasonable compensation.
What Changed in the Latest Release
The most recent OEWS release reflects several noteworthy changes that practitioners should be aware of when preparing or updating their analyses.
Updated wage figures. The new data captures wage levels that reflect post-pandemic labor market normalization. Industries that experienced sharp wage increases during 2021-2023 (healthcare, technology, logistics) are now showing more stable trajectories. Conversely, occupations in sectors that lagged during the pandemic recovery may show catch-up growth. The net effect is that wage benchmarks have shifted for many occupations, sometimes meaningfully.
SOC code reclassifications. The BLS periodically revises its Standard Occupational Classification system to reflect how work has evolved. Some occupations have been split into more specific codes, while others have been merged. If you referenced a particular SOC code in a prior-year analysis, that code may no longer exist in the same form. The BLS publishes crosswalk tables that map old codes to new ones, and practitioners should consult these when updating reports.
New metro area definitions. The Office of Management and Budget periodically revises MSA boundaries based on census data and commuting patterns. Some metropolitan areas have been expanded, split, or renamed. If your analysis relied on wage data for a specific MSA, confirm that the geographic definition has not changed in the latest release.
If a SOC code was reclassified or merged, your previous analysis may reference an occupation that no longer exists in the current dataset. Always verify your code selections against the latest BLS crosswalk before finalizing a report.
How This Affects Reasonable Compensation
The core issue is straightforward: if your reasonable compensation analysis references outdated BLS data, the IRS may question its reliability. A report prepared in 2026 that cites 2023 wage benchmarks leaves a gap that an examiner can probe. The question becomes whether the compensation figure you recommended was based on current market conditions or stale information.
This matters because reasonable compensation under IRC section 162 is inherently a facts-and-circumstances determination. One of the key factors is comparable compensation for similar services. If the comparable data you cite is two or three years old, the comparison loses its persuasive value. Updated data strengthens the factual foundation of your analysis.
If your 2026 filing references 2023 BLS wage data, an IRS examiner can argue that the benchmarks do not reflect current market conditions. Using the most recent available OEWS release closes this gap and makes your analysis harder to challenge.
Beyond the data itself, SOC code changes can create a more subtle problem. If the occupation code you used last year was reclassified, and you continue using the old code without acknowledging the change, it suggests the analysis was not carefully reviewed. Thorough documentation of your data sources and any year-over-year changes demonstrates diligence.
Best Practices for Using Updated OEWS Data
Keeping your reasonable compensation analyses current does not require starting from scratch each year. It does require a disciplined annual review process. Here are the key areas to address.
Annual refresh discipline. Treat the BLS OEWS release as a trigger to review and update every active analysis. When the new data is published, refresh your wage benchmarks for all ongoing client engagements. This is especially important for clients on recurring annual retainers where the analysis is used year after year.
SOC code mapping review. Before pulling new wage data, check whether any of the SOC codes in your analysis have been reclassified. The BLS crosswalk tables document these changes. If a code was split, determine which of the new codes best matches the shareholder's actual duties. If codes were merged, review whether the broader category still provides an appropriate benchmark.
Geographic data selection. Use state or metro-level data whenever it is available for the shareholder's location. National data is acceptable when the business serves a national market or the shareholder works remotely, but the rationale should be documented. If local data is unavailable for a specific occupation, state-level data is generally preferable to national averages. See our methodology page for more on how geographic adjustments work in practice.
Percentile selection and documentation. The percentile you choose matters. A shareholder with fifteen years of experience managing a mid-size firm is unlikely to fall at the 25th percentile. Conversely, selecting the 90th percentile requires strong justification. Document the factors that support your selection: years of experience, scope of responsibility, company revenue, industry specialization, and any credentials or certifications.
Adjustment guardrails for non-standard roles. Not every shareholder's duties map cleanly to a single SOC code. When the fit is imperfect, practitioners often use a weighted combination of multiple codes or apply adjustments. The key is establishing guardrails: explain the methodology, show the math, and state why the approach is reasonable. Unsupported adjustments invite scrutiny. A well-documented approach that references multiple BLS data points is far more defensible than a single figure pulled without explanation.
If a role does not map cleanly to a single SOC code, write out the logic you used to arrive at your benchmark. A one-paragraph explanation of your weighting methodology can prevent hours of back-and-forth during an examination. For a full guide, see documenting reasonable compensation.
How SafeRatio Incorporates BLS Updates
SafeRatio is built to handle the annual OEWS update cycle automatically. When BLS publishes new data, we ingest and validate the updated wage tables so that every report generated reflects the most current benchmarks available.
This means you do not need to manually track when BLS publishes new data, download spreadsheets, or cross-reference crosswalk tables. The platform handles the data pipeline so you can focus on the analysis and client communication.
Key Takeaways
- Use current data — always reference the most recent OEWS release in your reasonable compensation analysis
- Verify SOC codes annually — check BLS crosswalk tables for reclassifications that affect your selected occupations
- Prefer local data — use state or metro-level benchmarks when available, and document your geographic selection
- Document percentile choices — explain why the selected percentile reflects the shareholder's experience and responsibilities
- Establish adjustment guardrails — when roles do not map cleanly, show your methodology and reasoning
- Stale data is a liability — outdated benchmarks give the IRS a straightforward avenue to challenge your analysis
Always current. Always defensible.
SafeRatio automatically incorporates the latest BLS OEWS data, handles SOC crosswalks, and generates audit-ready reports.
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