Tax Bracket

A tax bracket is a range of taxable income taxed at one rate. Federal income tax has seven brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Only the income inside each range is taxed at that range's rate.

The dollar edges of each bracket move with inflation every year and depend on filing status. The paycheck calculator page lists the current brackets for every status. Many states have their own brackets, and some use one flat rate instead.

The rate on your last dollar is your marginal tax rate. Total tax divided by income is your effective tax rate, which is always lower. A raise that moves you into a higher bracket taxes only the extra dollars at the new rate. See what percentage of a paycheck goes to taxes.

A single filer earning $45,000 lands in the 12% federal bracket, so only the top slice of income is taxed at 12% and the first slice is still taxed at 10%. The effective federal rate, total tax divided by income, works out near 7%.

The single-filer tables on this site show $2,620 of federal income tax on $40,000 and $3,820 on $50,000, a $1,200 gap on $10,000 more pay, which is the 12% rate at work. Straight-line between those two rows puts federal income tax on $45,000 near $3,220, with another $3,443 for Social Security and Medicare at 7.65%, before any state tax.