Average burden
{{ headlineRateDisplay }}
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Disabled {{ selectedPreset.shortLabel }} {{ totalTaxDisplay }} included {{ marginalRateDisplay }} marginal {{ rateGapDisplay }} gap
Bracket presets apply only the published rate table and simple deduction/allowance logic described in the source notes.
{{ incomeBasisHelp }}
The result tabs always show gross, taxable, and adjusted/net bases side by side.
Gross income is also the default denominator for all-in burden comparisons.
{{ currency }}
This value drives the bracket tax when Income basis is already taxable.
{{ currency }}
Use zero when your gross income is already the taxable or chargeable amount.
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Manual mode uses this amount instead of any bracket engine.
{{ currency }}
Credits are capped at the calculated income tax so the net income-tax component cannot go below zero.
{{ currency }}
{{ payrollModeHelp }}
Use zero if you only want an income-tax effective rate.
{{ currency }}
Use this to keep all-in burden separate from income-tax-only effective rate.
{{ currency }}
Used for the rate-gap chart and side-income scenario in Manual totals mode.
%
Example: 5000,0 then 20000,1 then INF,30. Rates are applied progressively to taxable income.
Used for Manual totals and Custom brackets.
Use when a return, lender, or internal report explains rate burden against a non-gross denominator.
{{ currency }}
Use a bonus, raise, side project, or extra profit amount.
{{ currency }}
Example: Bonus estimate or year-end return review.
Choose cents for audit work or whole units for quick planning.
Appears in Formula Notes and JSON so exports stay auditable.
Metric Value Basis Copy
{{ row.metric }} {{ row.value }} {{ row.basis }}
Component Amount Effective rate Treatment Copy
{{ row.component }} {{ row.amount }} {{ row.rate }} {{ row.treatment }}
Bracket Rate Taxed amount Tax Copy
{{ row.bracket }} {{ row.rate }} {{ row.taxedAmount }} {{ row.tax }}
Scenario Income base Total tax Effective rate Delta Copy
{{ row.scenario }} {{ row.income }} {{ row.tax }} {{ row.rate }} {{ row.delta }}
Area Note Source Copy
{{ row.area }} {{ row.note }} {{ row.source }} 
{{ jsonPayload }}
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An effective tax rate is an average tax burden: tax divided by an income base. The same tax bill can produce different effective rates depending on whether the denominator is gross income, taxable income, or an adjusted net base. That denominator choice is the main reason two people can quote different rates from the same return.

Effective rate is different from marginal rate. Marginal rate describes the rate on the next slice of taxable income. Effective rate describes the average share of a chosen base that went to tax. In a progressive system, the marginal rate is often higher than the income-tax-only effective rate, but payroll taxes, state or local taxes, and other manually added components can make an all-in effective rate move differently.

Effective tax rate numerator and denominator Total included tax is divided by gross, taxable, or adjusted income to produce different effective rate views. Total included tax income tax payroll and other taxes gross income base taxable income base adjusted or net base Changing only the denominator changes the average rate, even when total included tax is unchanged.

Average-rate analysis is useful for return review, compensation planning, bonus estimates, side-income checks, and explaining why a bracket rate does not match the real share of income paid in tax. It is less useful when the question is eligibility for a credit, exact withholding, residency, local tax treatment, or a filing rule that needs personal facts not represented by a rate table.

Use the result as an educational planning estimate, not tax, legal, accounting, or payroll advice. Source tables and filing rules can change, and a correct average-rate calculation can still be incomplete if the wrong income base or tax components are included.

How to Use This Tool:

Choose the rate model first, then decide which income base should headline the average-rate result.

  1. Set Tax model. Use a supported official bracket preset, Custom progressive bracket table, or Manual completed-return totals when you already know the tax amount.
  2. Choose Income basis. Gross modes derive taxable income by subtracting the preset deduction or your custom deductions. Taxable / chargeable income already known applies brackets directly to the taxable amount you enter.
  3. Set Headline denominator to gross, taxable, or adjusted/net income. The rate ledger still shows all three bases side by side.
  4. Enter annual gross income and, when needed, taxable income, custom deductions, manual income tax, or credits and rebates. Credits are capped so the income-tax component cannot go below zero.
  5. Choose Payroll / social tax mode. United States presets can estimate 2026 employee FICA; other cases use either no payroll/social tax or a manual amount.
  6. Add State, local, or other taxes only when those amounts belong in the all-in rate you are trying to explain.
  7. Use Advanced for an adjusted/net denominator, a side-income or raise scenario, rounding, custom bracket rows, and a custom source label.

Read Rate Ledger first, then check Tax Components, Bracket Ledger, and Scenario Impact. If a custom bracket estimate looks too low, make sure the final row is open-ended with an INF upper limit.

Interpreting Results:

Headline effective rate is the rate using the denominator currently selected in the form. It is not automatically the best rate for every discussion. Gross-income effective rate is usually better for budget burden. Taxable-income effective rate is better for bracket-table review. Adjusted or net-base effective rate is useful when a return, lender, or management report uses a non-gross base.

Income-tax-only effective rate separates income tax from the all-in burden. Compare it with Total included tax and the tax-component rows before explaining a high average rate. Payroll/social taxes and manually added state, local, or other taxes can make the all-in rate higher than the bracket-only story suggests.

Output What it answers What to verify
Marginal / next-dollar rate Rate applied to the highest taxable bracket reached or the manual planning rate. Do not read it as the average burden on all income.
Marginal minus average gap Difference between the next-dollar rate and the selected headline average. Check whether payroll or other taxes are included in the average before drawing conclusions.
Scenario marginal effective rate Extra tax divided by the side-income or raise amount. Use it only when the scenario amount is positive and the same assumptions still apply.
After-tax gross income Gross income minus the modeled total included tax. Confirm that manually added components are not already included elsewhere.

A low effective rate does not prove the tax estimate is complete. Review the source notes, income basis, credits, payroll/social mode, and any manual other-tax amounts before using the result in a planning memo or client conversation.

Technical Details:

Effective rate is a ratio, so the numerator and denominator must be stated together. The numerator can be income tax only or a broader total that includes payroll/social and other taxes. The denominator can be gross income, taxable income, or an adjusted base. Mixing those choices without naming them is the most common source of confusion.

Progressive bracket presets calculate income tax by applying each rate only to the slice of taxable or chargeable income inside that bracket. Manual mode bypasses bracket math and uses the tax amount supplied by the user. Custom brackets are sorted by upper limit and treated as progressive rows, with an open-ended row needed for income above the last finite limit.

Formula Core:

The headline rate divides total included tax by the selected denominator. The same numerator is also recomputed against the gross, taxable, and adjusted bases for comparison.

Tincluded = max(0,Tincome gross-C)+Tpayroll+Tother Reffective = TincludedB Rscenario = Tscenario-TincludedI

In these formulas, C is credits or rebates applied after bracket tax, B is the selected headline denominator, and I is the added side-income or raise amount. Rates display as percentages with two decimal places.

Progressive bracket tax is the sum of each taxable slice multiplied by its bracket rate.

bracket tax = ∑ i=1 n ( max ( 0 , min ( X , Ui ) - Li ) × ri )
Model area Included rule Important exclusions
United States 2026 Federal ordinary-income brackets and standard deductions for supported filing statuses. Employee FICA can be added for U.S. presets. State tax, AMT, NIIT, capital gains, credit eligibility, and withholding rules are not inferred unless entered manually.
United Kingdom 2026/27 England, Wales, and Northern Ireland non-savings, non-dividend bands with Personal Allowance taper in gross-standard mode. Scotland, National Insurance, dividend and savings rates, and special allowances are excluded.
Malaysia resident YA 2025 Resident individual progressive rates on chargeable income. Reliefs, rebates, zakat, PCB/MTD reconciliation, and non-resident treatment are not inferred.
Singapore resident YA 2026 Resident individual rates from YA 2024 onward applied to chargeable income. Reliefs, rebates, donations, CPF, and non-resident comparisons are outside the preset.
Manual totals User-entered income tax, payroll/social tax, other tax, and marginal or next-dollar rate. The accuracy depends entirely on the entered return or planning worksheet totals.
Denominator Rate row Best use
Gross income Gross-income effective rate Budget burden and pay-to-tax communication.
Taxable or chargeable income Taxable / chargeable effective rate Bracket-table audit after deductions or allowances.
Adjusted or net income Adjusted / net-base effective rate Return review, management reporting, or a lender-style denominator.
Selected headline base Headline effective rate The rate shown in the summary and rate-gap comparison.

Accuracy Notes:

This is an educational finance estimate, not tax, legal, accounting, payroll, or investment advice. Use official forms, payroll records, return worksheets, and qualified tax support for filing decisions or high-stakes planning.

  • Official-source presets cover only the published bracket or allowance logic represented in the selected table.
  • Manual payroll, state, local, other tax, credits, deductions, and adjusted-base values are accepted as entered.
  • Using taxable income as the denominator can make an average rate look higher than a gross-income rate from the same tax bill.
  • A side-income scenario is a marginal planning estimate, not a withholding calculation or proof of final tax due.

Worked Examples:

A U.S. single filer enters $95,000 of gross income with the 2026 standard deduction, employee FICA included, and $3,800 of other tax. Taxable income is $78,900, federal bracket income tax is about $12,070.00, payroll tax is about $7,267.50, and total included tax is about $23,137.50. The gross-income headline effective rate is about 24.36%, while the marginal bracket rate is 22.00%.

The same case with a $10,000 side-income scenario shows why the scenario row is not the same as the current average. The added income increases total included tax by about $2,965.00, so the scenario marginal effective rate is about 29.65% on the added income.

A manual completed-return review can enter $100,000 gross income, $18,000 income tax, $7,000 payroll or social taxes, and $5,000 other taxes. The all-in effective rate on gross income is 30.00%, but the income-tax-only effective rate is 18.00%. That split prevents a payroll-inclusive burden from being mistaken for income tax alone.

A troubleshooting case starts with a custom bracket table that ends at a finite upper limit. If the bracket ledger stops before the income level being tested, add a final open-ended row such as INF,37 so income above the last limit is taxed.

FAQ:

Why are there several effective rates?

Each row uses the same total included tax with a different denominator: gross income, taxable or chargeable income, adjusted or net income, or the selected headline base.

Why can the marginal rate be lower than the all-in effective rate?

The marginal rate is usually an income-tax bracket rate. The all-in effective rate can also include payroll/social taxes and manual state, local, or other taxes.

Should I use gross income or taxable income?

Use gross income for budget burden and taxable or chargeable income for bracket-table review. If the result is being compared with a return line or business report, use the denominator that matches that document.

What should I check when the custom bracket result looks wrong?

Make sure each row has an upper limit and rate percent, the limits rise in order after sorting, and the final bracket uses an open-ended value such as INF.

Glossary:

Effective tax rate
Total tax divided by a stated income base.
Headline denominator
The gross, taxable, or adjusted base used for the main displayed average rate.
Marginal rate
The rate on the highest bracket reached or the next dollar of income.
Payroll or social tax
An additional employee, payroll, or social tax component that can be included in the all-in burden.
Taxable income
Income after deductions, allowances, or reliefs that the bracket table applies to.
Scenario marginal effective rate
Extra modeled tax divided by the added side-income or raise amount.

References: