Marginal vs Effective Tax Rate
Your marginal tax rate is the rate on your last dollar of income — the bracket you're 'in.' Your effective rate is total tax divided by total income, and it's always lower because your earlier dollars were taxed in lower brackets. Being in the 22% bracket does not mean you pay 22% on everything.
Put numbers on it. A single filer earning $75,000 in 2026 takes the $16,100 standard deduction, leaving $58,900 of taxable income and about $7,670 of federal tax. The last dollar is taxed at 22% — the marginal rate — while $7,670 against $75,000 is an effective rate of roughly 10.2%. The gap is more than a factor of two, and it exists because the deduction and the lower bands did most of the work first. Use the marginal rate to price a decision at the margin and the effective rate to describe what you actually pay; quoting the marginal rate as your tax burden overstates it enormously.
Put it to work
Federal Income Tax Calculator
Estimate your 2026 federal income tax: total tax, effective and marginal rates, and a bracket-by-bracket breakdown using official IRS figures.
Take-Home Pay Calculator
See your actual paycheck after federal tax, Social Security, Medicare, 401(k), health premiums, and state tax — per paycheck and per year (2026 figures).