Paycheck Calculator
Gross to net take-home, with every deduction shown.
Pay & Tax
Tax Bracket Calculator
Marginal against effective rate, with editable bands.
What it does. In a progressive system your top rate applies only to the income above that threshold, not to everything you earn. That is why your effective rate — total tax divided by total income — is always lower than your marginal rate, often by a lot.
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How to use Tax Bracket Calculator
- Enter your income and pick a preset, or type your own bands.
- Read the tax owed in each band.
- Compare the marginal rate against the effective rate.
The misunderstanding that costs people money
A very common belief is that crossing into a higher band taxes all of your income at the higher rate, so a raise can leave you worse off. In an ordinary progressive system that is not how it works.
Only the portion above the threshold is taxed at the higher rate. Earning one pound or dollar more than a threshold means that single unit is taxed higher — never the rest.
People genuinely turn down raises and overtime because of this. The one place the fear has real substance is where a benefit or allowance is withdrawn at a threshold, which is a cliff edge rather than a band — and that is worth checking separately.
Marginal against effective
| What it is | Use it for | |
|---|---|---|
| Marginal rate | The rate on your next unit of income | Deciding on overtime, a raise, a pension contribution |
| Effective rate | Total tax divided by total income | Understanding what you actually pay |
| Band rate | The rate applied within one band | Reading the table, not much else |
Both numbers are useful for different questions. Marginal answers "what does the next pound cost me"; effective answers "what proportion of my income goes in tax". Quoting one when you mean the other is where most confused tax arguments start.
Why the bands are editable here
Thresholds move, usually annually, and sometimes mid-year. A calculator with rates hard-coded into it produces confidently wrong answers for however long it takes someone to notice.
So the presets here fill in editable fields rather than hiding constants, and the tax year they came from is shown with the result.
Check the bands against your own tax authority before relying on the figure. If a preset looks out of date, correct it in the fields — the calculation follows what is on screen.
Frequently asked questions
Does moving into a higher tax bracket mean all my income is taxed more?
No. Only the income above that threshold is taxed at the higher rate. A raise cannot leave you worse off through banding alone — though a benefit withdrawn at a threshold is a genuine cliff edge worth checking separately.
What is the difference between marginal and effective tax rate?
Marginal is the rate on your next unit of income, which answers whether overtime is worth it. Effective is total tax divided by total income, which is what you actually pay. Effective is always the lower of the two.
Why can I edit the tax bands?
Because thresholds change, usually annually. Presets that are baked in produce confidently wrong answers for a year before anyone notices, so here they populate editable fields and the tax year is shown with the result.
Is this a substitute for filing?
No. It estimates liability from the figures you enter. Real returns involve reliefs, allowances and circumstances no calculator can see.
Why is my effective rate so much lower than my bracket?
Because most of your income was taxed in the lower bands beneath it. Someone in a 40% band commonly has an effective rate in the twenties.