The marginal tax rate calculator above answers a question that comes up every time someone's offered a raise, a bonus, overtime, or a side gig: how much of this extra money will I actually get to keep? Rather than estimating your whole year's taxes, this tool isolates just the new income you're considering and shows exactly what it costs in tax and what lands in your pocket.
Arb Digital built this as one of our free tools because so much bad financial advice circulates around "bracket creep" — the myth that earning more can somehow leave you with less. This calculator settles that question with real numbers from your own situation.
What This Marginal Tax Rate Calculator Does
This tool calculates your federal tax twice: once on your current taxable income, and once on your current taxable income plus the extra amount you're evaluating. The difference between those two tax figures is the tax specifically attributable to the new income — your marginal tax rate on that slice, expressed as a dollar amount and as a percentage. It also shows which tax bracket you're currently in and which bracket (if any) the extra income pushes you into, so you can see clearly whether a bracket change is even happening, and if so, how much of the new income is actually affected by it.
This is a fundamentally different question from your overall effective tax rate, which blends every bracket you've passed through. Your marginal rate is about the edge — the tax treatment of the next dollar, not the average treatment of all your dollars combined.
How to Use It
- Enter your current taxable income. This should be income after your standard deduction, not your gross salary. If you're not sure, subtract the standard deduction for your filing status from your gross income as a starting estimate.
- Choose your filing status. Single, Married Filing Jointly, or Head of Household changes where each bracket threshold falls.
- Enter the extra income you're considering. This could be a raise, a signing bonus, expected overtime, or projected income from a side gig or freelance project.
- Click Calculate. You'll immediately see your marginal rate on that specific chunk of income, the tax it generates, and your true take-home from it.
The Formula — How Marginal Rate Is Calculated
The U.S. federal income tax system is progressive, structured in tiers under the 2025 brackets published by the IRS for tax year 2025. Each bracket rate applies only to the income that falls within that specific range — not to your entire income. To find the tax on your extra income, this calculator computes total tax at your current income level, then computes total tax again with the extra income added, and subtracts the two. Whatever tax is added is entirely attributable to the new income, regardless of how many bracket boundaries it happens to cross.
Dividing that added tax by the extra income gives your effective marginal rate for this specific raise or bonus — which may be a single bracket's rate if the extra income stays within one bracket, or a blended rate if it straddles two brackets. Either way, the number reflects exactly what applies to your situation, not a generic bracket percentage pulled from a chart.
Debunking "A Raise Pushed Me Into a Higher Bracket, So I Take Home Less"
This is one of the most persistent myths in personal finance, and it's mathematically impossible under how the U.S. tax system actually works. Moving into a higher tax bracket does not mean all of your income gets taxed at the higher rate — it means only the income above that bracket's threshold does. Every dollar you earned before crossing into the new bracket keeps being taxed exactly as it was before.
Here's a concrete way to see it: if a single filer's income crosses from the 22% bracket into the 24% bracket at $103,350 in 2025, only the dollars earned above $103,350 are taxed at 24%. The dollars between $48,475 and $103,350 are still taxed at 22%, exactly as before. So a raise that pushes someone from $100,000 to $110,000 doesn't suddenly tax the whole $110,000 at 24% — it taxes about $6,650 of it (the portion above the threshold) at 24%, while the rest stays at the lower rates it was always at. The result is always more total take-home pay, never less, from earning more.
Where the myth sometimes has a grain of truth is with income-based phase-outs — certain tax credits and deductions shrink or disappear as income rises, which can offset some of the benefit of a raise. But even accounting for that, a straightforward marginal-rate bracket crossing on its own can never make your paycheck smaller in total.
Why This Matters for Raises, Bonuses, and Side Gigs
When you're deciding whether to take on overtime, negotiate a raise, or accept freelance work on the side, the number that matters isn't your average tax rate — it's your marginal rate on that specific new income. Someone with an average effective rate of 15% might still face a marginal rate of 22% or 24% on their next dollar of income, because the average blends in all the lower-taxed dollars from earlier brackets. Understanding your true marginal rate helps you evaluate whether extra work, a bonus, or a side hustle is worth it after tax, and helps you set realistic expectations for how much of a raise you'll actually see in your paycheck.
A Worked Example
Say a Single filer has $95,000 in taxable income for 2025, putting them in the 22% bracket (which runs from $48,475 to $103,350). They're offered $5,000 in extra income — a raise or a year-end bonus. Since $95,000 plus $5,000 equals $100,000, and $103,350 is the ceiling of the 22% bracket, the entire $5,000 stays within the 22% bracket and none of it crosses into the 24% tier. The tax on that extra income is exactly $1,100 (22% of $5,000), leaving $3,900 in additional take-home pay — a 22% marginal rate on the whole raise.
Now change the extra income to $10,000 instead of $5,000. Taxable income moves from $95,000 to $105,000, which crosses the $103,350 threshold into the 24% bracket. The first $8,350 of that raise (up to $103,350) is still taxed at 22%, and only the remaining $1,650 above the threshold is taxed at 24%. The blended marginal rate on the full $10,000 works out to about 22.3% — barely above the 22% bracket rate, not a dramatic jump to 24% across the board. This is exactly the kind of nuance a flat "which bracket am I in" lookup can't show you, and exactly what this calculator is built to reveal.
Marginal Rate vs. Effective Rate
- Marginal rate is the rate applied to your next dollar of income — the rate this calculator focuses on.
- Effective rate is your total tax divided by your total income — a blended average across every bracket you've passed through, always lower than your marginal rate in a progressive system.
- Your marginal rate tells you what a raise costs; your effective rate tells you your overall tax burden. Both are useful, but they answer different questions.
See your full-year refund or bill estimate, or check which bracket your total income lands in.
Find My Tax Bracket All Free ToolsCommon Mistakes to Avoid
- Entering gross income instead of taxable income. This calculator expects income after your standard deduction for an accurate bracket read.
- Assuming the whole raise gets taxed at the new bracket's rate. Only the portion above the threshold does — the rest stays at prior rates.
- Turning down a raise or bonus over bracket fears. A correctly understood marginal rate almost never justifies declining extra income, since take-home always increases.
- Ignoring state income tax. This tool covers federal tax only; your state may add its own marginal rate on top.
- Forgetting FICA on earned income. Wages (not investment income) also carry Social Security and Medicare tax, which isn't included in this federal income tax calculation.
Related Free Tools From Arb Digital
Want to see your full annual tax picture instead of just the marginal slice? Try our Tax Refund Calculator. Check exactly which bracket your income sits in with the Tax Bracket Calculator. If you want to see how a raise changes your actual paycheck withholding, use the Withholding Tax Calculator, or do a mid-year check with the Withholding Estimator. Ready to update your W-4 after a raise? Try the W-4 Calculator. Browse more in our free online tools hub.
Frequently Asked Questions
No. Only the income above the new bracket's threshold is taxed at the higher rate — everything you earned before that point keeps its original tax treatment. A raise always increases your total take-home pay.
Marginal rate is the tax rate on your next dollar of income. Effective rate is your total tax divided by total income — a blended average that's always lower than your marginal rate in a progressive system.
No, this calculator covers federal income tax only. Many states have their own income tax brackets that would add to your total marginal rate.
Use taxable income — your income after subtracting the standard deduction (or itemized deductions, if applicable) — for the most accurate bracket placement.
No. It only reflects the rate on the next dollar or the specific extra income you're evaluating. Your earlier income is still taxed at the lower rates of the brackets it fell into.
Generally you shouldn't decline extra income purely over bracket concerns. The rare exceptions involve losing eligibility for income-capped benefits or credits, which is a separate consideration from the marginal tax rate itself.
This tool provides general estimates for educational purposes only and is not financial, tax, legal, or medical advice. Figures are illustrative; consult a licensed professional for decisions.
