Effective Tax Rate Calculator
Calculate your effective (average) tax rate — total tax divided by total income — and see your after-tax income.
How to use this tool
- Enter your total income (use taxable income for the effective rate on taxable income).
- Enter the total tax you paid or expect to pay.
- Read your effective rate, after-tax income, and tax per $1,000 of income.
Find your effective (average) tax rate from any income and total tax. The effective rate is usually well below your top bracket because progressive systems tax each slice of income at its own rate.
Formula
Effective tax rate = Total tax ÷ Total income × 100%
After-tax income = Total income − Total tax
The effective rate is the average rate across all of your income. It differs from your marginal rate, which is the rate applied only to your last dollar earned.
How it works
The effective tax rate answers a simple question: of every dollar you earned, what fraction went to tax? It is computed as total tax divided by total income. Because most income-tax systems are progressive, your effective rate is almost always lower than your top marginal bracket — only the income inside the highest bracket is taxed at that top rate.
For a meaningful number, keep the numerator and denominator consistent. If you divide tax by taxable income you get the effective rate on taxable income; dividing by gross income gives a lower figure because deductions are excluded. This tool does not assume a jurisdiction or year — you enter both figures, so the result is correct anywhere.
Reviewed by the AbraCalc Tax Desk. This is an educational estimate, not tax advice; confirm definitions of income against your tax authority (for the United States, the IRS).
Worked example
$100,000 income, $18,000 tax
- Divide total tax by total income: 18,000 ÷ 100,000 = 0.18.
- Convert to a percentage: 0.18 × 100% = 18.00%.
- After-tax income: 100,000 − 18,000 = 82,000.
- Tax per $1,000 of income: 0.18 × 1,000 = 180.
Effective tax rate = 18.00%, after-tax income = $82,000.00
Effective rate at $80,000 income for various tax amounts
| Total tax | Effective rate | After-tax income |
|---|---|---|
| $0 | 0.00% | $80,000 |
| $4,000 | 5.00% | $76,000 |
| $8,000 | 10.00% | $72,000 |
| $12,000 | 15.00% | $68,000 |
| $16,000 | 20.00% | $64,000 |
| $20,000 | 25.00% | $60,000 |
| $24,000 | 30.00% | $56,000 |
Key terms
- Effective tax rate
- Total tax divided by total income — the average rate across all your income.
- Marginal tax rate
- The rate applied to your next (or last) dollar of income; the top bracket your income reaches.
- Taxable income
- Income remaining after deductions and exemptions, on which tax is actually computed.
- After-tax income
- What you keep after subtracting total tax from total income; also called net income.
Frequently asked questions
- What is the difference between effective and marginal tax rate?
- Your marginal rate is the rate on your last dollar of income (your top bracket). Your effective rate is the average across all income. In a progressive system the effective rate is lower because lower brackets tax earlier income at lower rates.
- Should I use gross or taxable income?
- Either works, but be consistent and know what the result means. Tax ÷ taxable income gives the effective rate on taxable income; tax ÷ gross income gives a lower number because it includes income removed by deductions.
- Can my effective rate be 0%?
- Yes. If deductions and credits reduce your tax to zero, your effective rate is 0% regardless of income.