How it works
The US uses progressive tax brackets — you do not pay your top rate on all income. Each bracket applies only to income within that range. Your marginal rate is the rate on your next dollar earned. Your effective rate is total tax divided by total income. On $75K single income: the first $11,600 is taxed at 10%, $11,600–$47,150 at 12%, $47,150–$75,000 at 22%. The effective rate is lower than the marginal rate because of the bracket structure. Building wealth is not about earning more — it is about the gap between what you earn and what you spend. A person earning $200,000 who spends $195,000 builds less wealth than someone earning $60,000 who spends $40,000. The savings rate matters more than the income level. Start by automating your savings on payday so the money never hits your checking account where you can spend it. Every field in this calculator exists for a reason. Enter Taxable income, Filing status, Single, Married Filing Jointly, Head of Household, All inputs stay in your browser. Adjust one field at a time to see which lever moves the answer most — the formula on this page lets you verify every step against the defaults shown in the worked example.
Formula
Effective rate = Total tax ÷ Taxable income × 100. Marginal rate = rate on next dollar earned.
Tips
- Your marginal rate is the rate on your next dollar — this determines the value of deductions.
- Effective rate is always lower than marginal rate due to progressive brackets.
- A raise that moves you into a higher bracket only taxes the new income at the higher rate.
- Deductions reduce your taxable income at your marginal rate.
Frequently asked questions
- Does moving to a higher tax bracket mean I take home less?
- No. Higher brackets only apply to income above the threshold. A raise from $46K to $48K puts some income in the 22% bracket, but your overall take-home still increases.
- What is the difference between marginal and effective tax rate?
- Marginal: the rate on your next dollar earned (your highest bracket). Effective: total tax paid ÷ total income (your average rate across all brackets). Effective is always lower than marginal.
- How accurate are the calculator results?
- The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.