Marginal vs. Effective Tax Rate: What Is the Difference?
Updated June 12, 2026 · PayCalc Editorial
These two numbers confuse almost everyone — here is the difference in about a minute.
Marginal tax rate
Your marginal rate is the rate on your last dollar of income — the top bracket your income reaches. For a single filer earning $100,000 in 2026, the marginal rate is 22%.
Effective tax rate
Your effective rate is the total tax you actually pay divided by your income. Because earlier dollars are taxed at lower rates, that same $100,000 earner has an effective federal rate of only about 14%.
Why it matters
A raise that pushes you "into a higher bracket" only taxes the new dollars at the higher rate — never your whole income. So a raise always increases your take-home. See the full breakdown with the federal income tax calculator or your take-home pay.