The U.S. federal income tax is progressive: each bracket’s rate applies only to the slice of income that falls inside it, not to your whole income at once.
How it works
Taxable income is walked through each bracket in turn. The first dollars are taxed at 10%, the next slice at 12%, and so on, up to whichever bracket your last dollar of income falls into — your marginal rate. The tax owed is the sum of every bracket’s share, then divided by total income to get the effective rate: what you actually paid on average, always lower than the marginal rate for anyone in more than the first bracket.
Marginal rate vs. effective rate
A common misreading is thinking your whole income is taxed at your marginal rate. It isn’t — only the portion inside that top bracket is. Someone in the 22% bracket does not pay 22% of their entire income; they pay 10% on the first slice, 12% on the next, and 22% only on what’s left after those lower brackets are used up.
How to use this calculator
- Choose your filing status.
- Enter your taxable income — after deductions, not your gross pay.
Frequently asked questions
What’s the difference between taxable income and gross income?
Taxable income is what’s left after subtracting deductions — the standard deduction, or itemized deductions if higher. This calculator’s take-home-pay calculator starts from gross pay and applies the standard deduction for you.
Why don’t you support Head of Household or Married Filing Separately?
Not yet built — only Single and Married Filing Jointly are covered right now, stated plainly rather than approximated with the wrong brackets.
Do these brackets include state income tax?
No — this is federal tax only. State income tax, where it exists, is calculated separately under each state’s own rules.
Why does my effective rate look much lower than my bracket?
Because only your top slice of income is taxed at the marginal rate — everything below it is taxed at the lower brackets it passed through first.
