Progressive Tax Calculator

How it is calculated

This is a two-bracket model. Income up to the bracket 1 limit is taxed at rate 1, and only the part above the limit is taxed at rate 2: tax = limit × rate1 ÷ 100 + (income − limit) × rate2 ÷ 100. If income is at or below the limit, it is simply income × rate1 ÷ 100. Income and limit are amounts in dollars and must be zero or higher; the rates are percentages between 0 and 100 (10 means 10%), and a rate above 100 or below 0 gives no result. The effective rate is tax ÷ income × 100, shown as 0% when income is zero, and the after-tax figure is income minus tax. The tool uses your own two brackets, with no allowances, deductions or credits, so it does not reproduce any particular country's tax table. It does not check that rate 2 is higher than rate 1, so the order of the rates is your responsibility.

Common mistakes

• Applying the higher rate to the whole income. Only the part above the bracket limit is taxed at rate 2, which is why the 17.41% effective rate is well below the 24% top rate.
• Typing the rates as decimals. Enter 24 for 24%; typing 0.24 means 0.24%.
• Entering the upper end of the first bracket as the income, or the bracket width instead of the threshold. The limit is the income level where rate 2 begins.
• Entering gross income and expecting net pay to match a payslip. Payroll deductions, allowances and credits are not modelled here, so the after-tax figure is only the bracket result.
• Using a real tax table with more than two brackets. Collapse the brackets you do not need or run the top slice separately; this tool handles exactly two.