Marginal vs. effective rate — the difference that matters
Your marginal rate is the rate applied to your last dollar of income — the bracket you're "in." Your effective rate is your total tax divided by your total income — your real, overall average. They are almost never the same, and confusing them is the single most common tax misconception. This calculator shows both, plus the tax on your next $1,000 earned, so you can make smart decisions about raises, bonuses, overtime, and retirement contributions.
Why your bracket isn't your tax rate
The U.S. uses a progressive, marginal system: income is sliced into bands, and each band is taxed at its own rate. Only the income that falls inside the top band is taxed at your marginal rate — everything below is taxed at the lower rates. So a single filer "in the 22% bracket" pays 10% and 12% on most of their income and 22% only on the slice above the threshold. That's why the effective rate is always lower than the marginal rate.
How to use the result
- Marginal rate tells you the value of a deduction. In the 22% bracket, every $1,000 you contribute to a traditional 401(k) saves about $220 in tax.
- Tax on your next $1,000 shows what a raise or side income really costs in tax — useful for deciding whether to defer income or accelerate deductions.
- Effective rate is the honest headline number for "how much of my income goes to federal income tax."
The bracket-by-bracket table shows precisely how your tax is built, band by band — the same logic explained in plain English in our guide to how tax brackets actually work.
What's included
This calculator applies the current-year brackets and the standard deduction for your filing status to estimate federal income tax. It doesn't include FICA payroll taxes, state tax, or credits — for a complete picture with the child tax credit and itemized deductions, use the full income tax calculator. For the underlying numbers, see the 2026 tax brackets reference.