Effective vs. Marginal Tax Rate Calculator
Understand the difference between your marginal bracket and your real, effective tax rate.
This is an estimate for the 2026 tax year, not tax, legal, or financial advice. Figures are simplified and don't include every credit or deduction. Talk to a tax professional before making decisions.
You pay 22.0% on your last dollar, but only 11.0% on average across all of it.
Effective 11.0%Marginal 22.0%— a 11.0% gap
11.0%
average across all income
22.0%
rate on your last dollar
11.0%
marginal minus effective
Why they differ: tax by bracket slice
| Bracket | Tax for this slice |
|---|---|
| 10% on $12,400 | $1,240 |
| 12% on $38,000 | $4,560 |
| 22% on $13,500 | $2,970 |
| Total federal tax | $8,770 |
How this is calculated
Your marginal rate is the tax rate on your last dollar of taxable income — the highest bracket your income reaches. A lot of people mistakenly think this is the rate they pay on everything they earn.
In reality, only the income inside that top slice is taxed at the marginal rate. Every dollar below it is taxed at the lower rates that came before, because federal brackets are progressive and apply slice by slice.
Your effective rate is your total federal tax divided by your income — a blended average across every slice. It is always lower than (or equal to) your marginal rate, and it's the number that best describes how much of your income actually goes to federal tax.