Marginal Tax Rate Calculator
Determine your highest IRS marginal tax bracket and calculate exactly how much tax you will owe on your next bonus, overtime, or pay raise.
Marginal Tax Increment
Marginal Tax Increment Formula
Marginal Tax Owed = Tax(Income + Bonus) − Tax(Income) | Marginal Retention Rate % = 100 − Marginal Tax Rate %- Top Marginal Bracket: The percentage rate applied to the very last dollar of taxable income.
- Next Dollar Tax: The precise tax liability triggered when accepting overtime, consulting gigs, or salary bonuses.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Based on 2024 IRS federal statutory tax brackets.
Frequently Asked Questions
Why are bonuses taxed higher on paychecks?
The IRS classifies bonuses as supplemental wages, and employers often withhold a flat 22% federal rate (or 37% over $1 million) plus FICA and state taxes. However, when you file your annual tax return, bonuses are reconciled at your true marginal rate.
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