Tax Bracket Calculator
Enter your income, filing status, and pre-tax contributions. We compute your 2025 federal income tax across the brackets and show your effective rate next to your marginal bracket.
Most people overestimate their tax rate. Your effective rate is almost always several points below your marginal bracket.
22%
most common marginal bracket for middle earners
13.3%
average US effective federal tax rate
7.65%
FICA rate on top of income tax (Social Security + Medicare)
Tax rates most people misunderstand
Progressive taxation explained
You pay 10% on the first ~$11,900, then 12% on the next slice, then 22% and so on. Only the income above each threshold hits the next rate. No one actually pays 22% on everything.
How to lower your effective rate
Maximising pre-tax contributions (401k, HSA, FSA, traditional IRA) reduces your taxable income directly — every dollar contributed at 22% saves you 22 cents in tax.
Capital gains are different
Long-term capital gains (assets held 1+ year) are taxed at 0%, 15%, or 20% — separate from your ordinary income bracket. This is why investing can be more tax-efficient than earning wages.
Marginal vs effective rate formula
Formula
Tax Owed = sum of (income in each bracket × bracket rate)
Effective Rate = Total Tax ÷ Gross Income × 100
Marginal Rate = rate applied to your highest dollar of incomeEffective rate (%) = (total taxes ÷ gross income) × 100. This is your true tax burden — the number that actually matters for budgeting.
Marginal rate = the rate that applies to your highest dollar of income. It only applies to income above the bracket threshold, not your entire income.