Marginal vs. effective tax rate calculator

Both rates, computed from the 2024 brackets — the marginal rate on your next dollar and the effective rate you average across all of it. Then FICA and state tax stacked on top, because that is the rate that actually decides things.

How the math works

Two rates come out of the same tax bill, and they answer different questions. The marginal rate is what your next dollar is taxed at. The effective rate is total tax divided by income — the average across every dollar.

Federal income tax is progressive, so each slice of taxable income is taxed only at its own bracket rate: 10% up to $11,600, 12% to $47,150, 22% to $100,525, and up for a single filer. The rate on your last slice is your bracket. Divide the whole tax bill by income and you get the effective rate, which is always lower because the first slices were taxed at 10% and 12%.

The federal bracket is not the rate that decides anything, though. Wages also carry FICA — 7.65% for Social Security and Medicare — and, in most states, a state income tax. Stack those on the next dollar and the real marginal rate on a raise, a bonus, or a side gig is well above the number the bracket table shows.

Worked example

Take a single filer earning the U.S. median individual income for full-time workers, $59,540. Subtract the 2024 standard deduction of $14,600 and taxable income is $44,940. The federal tax is built in two slices:

• 10% on the first $11,600 = $1,160
• 12% on the next $33,340 = $4,000.80

Federal income tax: $5,160.80. The top dollar sits in the 12% bracket, so the federal marginal rate is 12%. Now add FICA at 7.65% of the full $59,540 — that is $4,554.81 — for a total tax of $9,715.61.

Two numbers fall out. The effective rate is $9,715.61 ÷ $59,540 = 16.3%, the average share of the paycheck that goes to federal tax and FICA. The combined marginal rate — the tax on the next dollar of wages — is 12% federal plus 7.65% FICA, or 19.65%. The bracket table said 12. The dollar that actually decides whether an extra shift is worth it is taxed at almost twenty, before a single point of state tax.

When this calculator is wrong

This tool answers a narrow question — federal income tax plus FICA plus a flat state rate on wages — and there are several ways to over-read it.

• The state leg is a flat approximation. Real state codes have their own brackets, standard deductions, and credits. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — levy no broad wage income tax at all, while the top state rate reaches 13.3% in California. Enter your state's actual rate; the spread across states on the same income is roughly 13 percentage points.
• It is a wage picture, not a whole-return picture. Long-term capital gains and qualified dividends run on a separate rate schedule, and pre-tax 401(k) or HSA contributions lower the taxable income this page starts from. The self-employed pay both halves of FICA — 15.3% — not the 7.65% employee share modelled here.
• FICA's marginal rate changes with income. Social Security's 6.2% stops at the $168,600 wage base, so above it the next dollar carries only Medicare's 1.45%. An extra 0.9% Medicare surtax applies to wages above $200,000 for a single filer. The combined marginal rate is not a single number across your whole income.
• The numbers are 2024. Brackets, the standard deduction, and the Social Security wage base adjust for inflation each year. The rates hold; the dollar thresholds move.

What to do with the result

Use the two rates for two different jobs, and stop quoting one when you mean the other. The effective rate is the honest answer to "what share of my income goes to tax" — it is the number for comparing years, comparing filers, or budgeting. The combined marginal rate is the decision number: it is what a pre-tax dollar saves and what the next dollar earned costs.

The clearest use is a traditional 401(k) or HSA contribution. A dollar contributed pre-tax saves your combined marginal rate this year, not your effective rate and not just your federal bracket. For the median single earner above, that is roughly 19.65% before state tax — every $1,000 into the plan is about $197 kept, not $120. When you next weigh a Roth-versus-traditional call or whether a side gig clears its tax, read the marginal number off this page, not the bracket table.

Common questions

What is the difference between marginal and effective tax rate?

The marginal rate is what your next dollar is taxed at — your bracket, plus FICA and state tax on wages. The effective rate is total tax divided by total income, the average across every dollar. The effective rate is always lower, because the first slices of income are taxed at the lower 10% and 12% brackets.

Which rate should I actually use?

Use the marginal rate for decisions about the next dollar: a pre-tax contribution, a raise, a bonus, a side gig, or a Roth-versus-traditional choice. Use the effective rate to describe your overall tax burden or to compare one year against another. Quoting your marginal rate as "my tax rate" overstates what you hand over.

Is my marginal rate the same as my tax bracket?

Not on wages. Your federal bracket is one piece. The dollar you actually earn also carries FICA at 7.65% and, in most states, state income tax. A single filer in the 22% federal bracket faces closer to 29.65% on the next wage dollar before state tax, and more after it.

Why is my effective rate so much lower than my bracket?

Because the bracket only applies to your top slice of income. Everything below it is taxed at lower rates — the first $11,600 at 10%, the next band at 12%, and so on. A single filer with $90,000 of taxable income is in the 22% bracket but pays an effective federal rate of about 16.5%.

Does this include Social Security and Medicare?

Yes, on the wage side. FICA is 7.65% of wages — 6.2% Social Security up to the $168,600 wage base, plus 1.45% Medicare with no cap. It does not include the employer's matching half, and the self-employed owe both halves as 15.3%.