Marginal vs. Effective Tax Rates
"I can't take the raise — it'll bump me into a higher bracket and I'll take home less." People genuinely turn down money over this, and it is never true. The confusion comes from mixing up two different numbers: your marginal rate (the tax on your next dollar) and your effective rate (the average tax on all your dollars). This guide untangles them with real 2026 numbers; any state take-home page on this site will do the arithmetic for your own salary.
Brackets tax slices, not salaries
The federal income tax is a staircase. For a single filer in 2026, the first $12,400 of taxable income is taxed at 10%, the slice from there to $50,400 at 12%, the next slice to $105,700 at 22%, and so on up to 37%. Landing "in the 22% bracket" means only the dollars inside that slice are taxed at 22% — every dollar below the line keeps its lower rate, permanently. A raise can only ever add dollars taxed at your marginal rate; it cannot re-tax the dollars underneath.
Taxable income is not your salary
Before any bracket applies, the standard deduction comes off the top: $16,100 for single filers in 2026 ($32,200 married filing jointly). A $75,000 salary is therefore only $58,900 of taxable income. This one subtraction is why effective rates are always lower than people guess — the first $16,100 you earn is federally untaxed.
A $75,000 example, slice by slice
| Taxable income slice | Rate | Tax |
|---|---|---|
| $0 – $12,400 | 10% | $1,240 |
| $12,400 – $50,400 | 12% | $4,560 |
| $50,400 – $58,900 | 22% | $1,870 |
Total federal income tax: $7,670. That is an effective federal rate of 10.2% on the $75,000 salary — even though this earner's marginal rate is 22%. Ask them "what's your tax rate?" and they will probably say 22%; the checkbook answer is less than half that.
The rates nobody calls a tax bracket
FICA runs alongside the income tax with no brackets and no deduction: 6.2% Social Security on wages up to $184,500 in 2026 and 1.45% Medicare on everything, plus 0.9% more above $200,000. On the $75,000 example that adds $5,738, bringing the all-in federal effective rate to 17.9%. State income tax, where it exists, stacks on top — from nothing in nine states to double digits at high incomes in a few. Our per-state pages show the full federal-plus-state picture at any salary.
So can a raise ever actually hurt?
Not through the brackets — the math above makes that impossible. The grain of truth behind the myth lives elsewhere: benefit cliffs. Some income-tested programs, credits, and subsidies cut off sharply at a threshold rather than phasing out, and crossing one of those lines with a small raise can genuinely cost more than the raise. That is a real thing to check if you receive income-tested benefits — but it is a cliff in a specific program's rules, not in the tax code's brackets. For the tax itself, the rule has no exceptions: more gross always means more net.
Which number should you use for decisions?
Use the marginal rate for decisions about the next dollar: whether a 401(k) contribution is worth it (see the 401(k) guide), what a side project nets you, what a deduction is actually worth. Use the effective rate for budgeting, because it is what actually leaves your pay over the year. Neither is "your tax rate" alone — they answer different questions, and most money mistakes in this area come from using one where the other belongs.
Figures are 2026 amounts from the IRS inflation adjustments (single filer unless noted); source URLs are kept with the data in the site repository. General information, not tax advice.