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Effective Tax Rate Calculator

Find your true average tax rate in seconds

How it is calculated

The tool divides what you paid by what you earned: effective rate (%) = total_tax ÷ total_income × 100. Both values are amounts in the same currency and the same period, for example one tax year. After-tax income is simply total_income − total_tax.

Both fields are required, income must be greater than zero and tax cannot be negative; otherwise no result is shown. The tool does not work out any tax for you and applies no country's brackets, so use the tax figure from your return or payslips. Which taxes you count (income tax only, or social contributions too) changes the answer.

Worked example

Total income is 85000 and total tax paid is 17850.

Step 1: 17850 ÷ 85000 = 0.21. Step 2: 0.21 × 100 = 21 percent, shown as 21.00%. Step 3: 85000 − 17850 = 67150, so after-tax income is $67,150.00. On average, 21 cents of each dollar earned went to tax.

Try this example →

Common mistakes

  • Entering taxable income instead of total income. The rate is measured against the figure you type, so a post-deduction number gives a higher rate than your real burden.
  • Mixing periods, such as monthly tax with annual income. Both values must cover the same period.
  • Reading the result as your marginal rate. The effective rate is an average; the rate on your next unit of income is usually higher.
  • Counting only income tax in one year and income tax plus social contributions in another, then comparing the two rates.
  • Typing the tax rate (for example 21) in the tax field instead of the amount paid.

Sources

About this calculator

Your effective tax rate is total tax paid divided by total income, expressed as a percentage — the real average share of every dollar you earned that went to tax, as opposed to your marginal rate, which is just the rate on your last dollar of income.

Because progressive tax systems apply higher rates only to income above each bracket threshold, your effective rate is almost always lower than your top marginal bracket. Accountants and personal-finance writers use it to compare tax burdens across incomes and countries, and it's the number that actually tells you what fraction of your paycheck taxes really took.

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Comments (1)

  • Editorial team

    This tool does not apply any brackets, but you can use it to see your marginal burden on a raise. Run it twice, once for the old income and tax and once for the new, then divide the extra tax by the extra income. That ratio is what the raise was actually taxed at, usually higher than either average rate. Be sure both runs count the same taxes, for example income tax with or without social contributions. What did your own comparison show?

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