Effective Tax Rate Calculator

Effective vs. Marginal: What's the Difference?

Your effective tax rate is what you actually pay as a percentage of your income. Your marginal rate is what you pay on your last dollar.

Why Your Effective Rate Is Always Lower

The US has a progressive tax system. If you're in the "22% bracket," you don't pay 22% on everything—you pay:

• 10% on your first $11,600
• 12% on income from $11,600 to $47,150
• 22% only on income above $47,150

Then the standard deduction ($14,600 for singles in 2024) removes a chunk of income before any tax applies.

Quick Example

If you earn $80,000 and pay $15,000 in total taxes:

$15,000 ÷ $80,000 = 18.75% effective rate

Even though this person might be in the 22% bracket, their effective rate is under 19%.