Tax Bracket Calculator
Enter your income and total taxes paid to see your effective rate vs your marginal bracket. Understand the difference and stop over-estimating what you owe.
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
Effective 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.