US Income tax estimator

How income tax is calculated

Income tax in every supported market uses progressive brackets — each slice of taxable income is taxed at that bracket's rate, not the top rate applied to your whole income. Your taxable income is gross income minus the applicable standard deduction or personal allowance.

Worked example (US, single filer, TY 2025)

Salary: $90,000. Standard deduction (single): $15,000. Taxable income: $75,000.

• First $11,925 at 10% = $1,193
• Next $36,550 (to $48,475) at 12% = $4,386
• Next $26,525 (to $75,000) at 22% = $5,836
• Total federal income tax: $11,415

Effective rate: $11,415 ÷ $90,000 = 12.7%. Marginal rate: 22%. Even though your top bracket is 22%, only the portion above $48,475 is taxed at 22% — and your effective rate is much lower.

Marginal vs effective rate

The most-misunderstood concept in personal tax. Your marginal rate is the rate paid on your next dollar — the top bracket you've reached. Your effective rate is total tax ÷ gross income, which is always lower because the earlier brackets taxed at lower rates.

When a raise pushes you into a higher bracket, only the portion of income above the bracket threshold is taxed at the higher rate. A salary bump never causes your take-home to fall. It's the most common myth in personal finance.

What this includes

• US: Federal income tax (2025 brackets, single & MFJ), Social Security, Medicare, Additional Medicare. State tax not yet included.
• UK: Income tax (2025/26, England/NI/Wales), National Insurance Class 1, optional student loan plans 1/2/4/5 & PGL. Personal allowance taper above £100,000 applied.
• Canada: Federal income tax (2025), CPP1, CPP2, EI. Provincial tax planned.
• Australia: Resident income tax (TY 2025/26 Stage-3 rates), Medicare levy, optional HECS-HELP.

Common mistakes

• Treating marginal rate as the rate paid on all income. It's only the rate on the top slice.
• Forgetting payroll/social contributions. Your total tax feels higher than the income-tax bracket suggests because Social Security, Medicare, NI, CPP, etc. stack on top.
• Ignoring the personal allowance taper (UK). Earnings between £100,000 and £125,140 carry an effective marginal rate of 60%.
• Treating tax brackets as cliffs. They're not — moving up a bracket only affects income above the threshold.

What this calculator doesn't cover

• US: State and local income tax (varies hugely — 0% in TX/FL/WA to 13.3% top rate in CA), AMT, itemised deductions, credits (CTC, EITC).
• UK: Scottish income tax bands, Marriage Allowance, Personal Savings Allowance complexity, dividend tax, child benefit clawback.
• Canada: Provincial income tax, most credits and deductions, RRSP/TFSA optimisation.
• Australia: Private health insurance rebate, low/middle-income tax offset interactions, foreign income.

For a full tax return, use HMRC's tools, the IRS estimator, or a qualified accountant. This calculator is for quick estimation.