Income Tax Calculator

Income tax formulas

Why a 20% bracket produces an 11.67% bill on $60,000

Income $60,000, no deductions, with bands of 0% to $10,000, 10% to $40,000, 20% to $85,000, and 30% above. Band by band: $10,000 × 0% = $0; $30,000 × 10% = $3,000; $20,000 × 20% = $4,000; nothing reaches the 30% band. Total tax is $7,000, leaving after-tax income of $53,000. The marginal rate is 20% — the rate on the last dollar earned — but the effective rate is only 7,000 ÷ 60,000 = 11.67%, because the first $10,000 was tax-free and the next $30,000 was taxed at just 10%. Multiplying the whole $60,000 by the 20% bracket, a common mistake, would wrongly produce $12,000.

That arithmetic is the whole of a progressive income tax. Income tax is a government levy on the money you earn — wages, business profit, interest, and other income — and most countries split it into bands taxed at their own rates, so higher slices of income pay higher rates while lower slices keep their lower rates. Taxable income is run through the bands in order, each band taxing only the income that falls inside it: Tax in Band = Amount in Band × Band Rate. The total is the sum across bands, credits subtract after that, and surcharges or social contributions add on top. The band-by-band table is the core of the result for exactly that reason: it shows how much of your income falls in each bracket and how much tax that slice contributes, so the total is never a mystery multiplication.

Two rates sit above the table. The marginal rate is what your next dollar of income would be taxed at; the effective rateThe average rate you actually pay across all your income — lower than your top tax bracket. is total tax divided by gross income, the honest average. Your bracket applies only to the top slice, and everything below it was taxed in cheaper bands — often starting at 0% — so the effective rate stays at or below the marginal rate whenever any income sits in those cheaper bands. The gap between the two is usually the most surprising number on the page.

The $1,000 deduction that saves $200, and the $1,000 credit that saves $1,000

A deduction reduces taxable income, so it saves roughly its amount × your marginal rate: at a 20% marginal rate, $1,000 of deduction is worth about $200. A credit reduces the tax itself, so $1,000 of credit is worth the full $1,000 — five times as much at that rate. Refundable credits can even be paid out beyond the tax; non-refundable ones stop at zero. Moving a figure between the deductions box and the credits box is therefore never cosmetic, which is why the calculator applies the two at different points in the chain.

Credits here are treated as non-refundable, flooring the tax at zero, except where explicitly labelled refundable. Surcharges apply to tax after credits (% of tax), to gross income (% of income), or as a fixed amount, per your selection. The band-system modes apply exactly the bands, deductions, credits, surcharges, and social contributions you enter — nothing else.

Under the two rates the result shows after-tax income, the deductions and credits actually applied, and — if you entered withholding or payments — an estimated refund or amount owed, since withholding is a prepayment rather than the final tax. Switch to Compare mode to see how a raise, a deduction, or a different filing status moves every one of those numbers side by side.

Effective rate and marginal rate at seven income levels

A bracket is the rate on the next dollar, not on the whole income. Below are the sourced US federal single-filer bands for 2025 (filed 2026) at seven gross incomes, after the $15,750 standard deduction. The gap between the two rates is widest just after a bracket boundary is crossed, not at the top of the scale. US mode builds these from sourced IRS figures for the selected year plus simplified IRS worksheets for Social Security taxability, SE tax, capital-loss netting, preferential-rate stacking, and the CTC/ACTC; the effective rate is measured against gross income as entered, and MAGI is approximated by AGI for phase-outs.

Where the effective rate crosses 10%, 20% and 30% in each built-in system

The five built-in systems differ less in their top rates than in how fast the average rate climbs toward them. Each figure is the gross income at which this calculator first returns that effective rate, in that system’s own currency at its own sourced rates — no exchange rate is applied.

The 60% band the UK personal-allowance taper creates

The UK preset removes £1 of personal allowance for every £2 of income above £100,000. Inside that taper the extra pound is taxed at 40% while the shrinking allowance pushes 50p up a band at each end, so the next £1,000 costs more there than it does above £125,140, where the 45% additional rate applies.

The ₹12 lakh rebate boundary, and what the next ₹1,000 of salary costs

Under the new regime the section 87A rebate cancels up to ₹60,000 of tax while total income stays at or below ₹12,00,000, so after the ₹75,000 standard deduction a salary of ₹12,75,000 pays nothing. Above it the marginal-relief proviso caps the tax at the excess over ₹12,00,000 and the 4% cess is charged on that capped figure — which is why, as this calculator models it, the next ₹1,000 of salary costs more than ₹1,000. Selecting India computes the old regime and the new regime (u/s 115BAC) side by side for the same income and shows which one results in lower tax, using sourced slab rates, standard deduction, and section 87A figures for the current assessment year; the table below follows the new regime.

Where the five sourced presets stop and your own bands take over

The United States, the United Kingdom, New Zealand, India, and the UAE have built-in sourced bands you can select directly. Canada — including provincial tax — Australia, and Singapore do not, and nor does anywhere else. For those, switch to a custom tax-band mode and enter the official band thresholds, rates, deductions, credits, surcharge (a cess as a % of tax, for instance), and social contributions for your year and currency: the calculator applies them faithfully and never guesses another country’s law for you. The trade is that manual and global modes cannot validate that the bands you entered match your country’s statute, so verify them against official sources before trusting the total.

Inside US mode the estimate is federal only, and every limitation that follows is a place where the model stops rather than guesses. State and local taxes paid are an input to the itemized SALT deduction, not a return calculated in its own right: in Texas and the other states with no income tax the federal result is the complete picture, while in California and every state that levies its own income tax you add that calculation separately. It is not a filing tool either — no AMT, EITC, QBI, NIIT, state returns, or every credit phase-in — and manual overrides are what cover the rest. OBBBA’s temporary “no tax on tips” and overtime deductions (2025–2028) are not auto-applied: the calculator warns when tips are entered, and you can approximate an eligible deduction under “Other adjustments”. Special-rate income outside US mode — a separate capital-gains regime, say — has to be handled with your own bands or excluded.

India mode is configured for Assessment Year 2026-27 (Financial Year 2025-26) with figures sourced from the Income Tax Department, and US mode supports the 2025 and 2026 tax years. Those move as new rates are confirmed, and figures for future years stay planning estimates until official values are final — so check that the tax year shown on the page is the year you need.

This is an estimate, not a filed computation. For net pay across pay periods use the salary & take-home pay calculator; for consumption taxes see the VAT/GST calculator.

Sources and methodology

Every rate, band, threshold and deduction shipped with this calculator comes from the authority that sets it, pinned to a named tax year rather than reproduced from memory. Each entry below names the figure it backs. Links open in a new tab.

• Federal income tax rates and brackets - the graduated-bracket mechanics behind the band-by-band breakdown and the marginal rateInternal Revenue Service (IRS) · tax year 2025-2026 · verified 2026-09-01
• Rev. Proc. 2024-40 - official 2025 inflation adjustments: bracket thresholds, capital-gains breakpoints and the age-65 additional standard deductionInternal Revenue Service (IRS) · tax year 2025 · verified 2026-09-01
• Working Families Tax Cuts for individuals and workers - the 2025 standard deduction, the 2,200 dollar child tax credit, the senior deduction and the SALT cap this calculator appliesInternal Revenue Service (IRS) · tax year 2025-2028 · verified 2026-09-01
• Tax year 2026 inflation adjustments (Rev. Proc. 2025-32) - the 2026 brackets, standard deduction and capital-gains breakpointsInternal Revenue Service (IRS) · tax year 2026 · verified 2026-09-01
• Child Tax Credit - the 2,200 dollar credit, the 1,700 dollar refundable portion and the 200k/400k income phase-out used in the credits stepInternal Revenue Service (IRS) · tax year 2025-2026 · verified 2026-09-01
• Self-employment tax - the 15.3 percent Social Security plus Medicare structure and the half-of-SE-tax deduction applied in self-employed modeInternal Revenue Service (IRS) · tax year Current · verified 2026-09-01
• Instructions for Schedule SE - the 92.35 percent net-earnings factor and the 400 dollar filing floor for self-employment taxInternal Revenue Service (IRS) · tax year Current · verified 2026-09-01
• Contribution and benefit base - the Social Security taxable maximum (176,100 dollars for 2025, 184,500 dollars for 2026) that caps the OASDI part of self-employment taxSocial Security Administration (SSA) · tax year 2025-2026 · verified 2026-09-01
• Publication 915 - how much of a Social Security benefit becomes taxable at each provisional-income thresholdInternal Revenue Service (IRS) · tax year 2025 · verified 2026-09-01
• Tax withholding for employees - why withholding is a prepayment, which is what turns the result into a refund or an amount owedInternal Revenue Service (IRS) · tax year Current · verified 2026-09-01
• Income Tax rates and Personal Allowances - the 12,570 pound allowance, 20 percent basic rate to 50,270 pounds, 40 percent higher rate to 125,140 pounds and 45 percent additional rate in the UK presetHM Revenue and Customs (GOV.UK) · tax year 2026-27 · verified 2026-09-01
• Adjusted net income - the taper that removes 1 pound of personal allowance for every 2 pounds of income above 100,000 pounds, which the UK preset applies automaticallyHM Revenue and Customs (GOV.UK) · tax year 2026-27 · verified 2026-09-01
• Tax rates for individuals - the 10.5 / 17.5 / 30 / 33 / 39 percent bands from 1 April 2025, and the absence of any tax-free threshold, in the New Zealand presetInland Revenue (IRD), New Zealand · tax year 2025-26 · verified 2026-09-01
• Salaried Individuals for AY 2026-27 - the new-regime and old-regime slabs, section 87A rebate, surcharge bands and 4 percent cess the India engine computesIncome Tax Department, Government of India · tax year AY 2026-27 (FY 2025-26) · verified 2026-09-01
• The Finance Bill, 2025 (Bill No. 14 of 2025), clause 20 - the section 87A rebate and its marginal-relief proviso, which is what makes new-regime income up to 12 lakh tax-free rather than a change to the slabs themselvesMinistry of Finance, Government of India · tax year FY 2025-26 · verified 2026-09-01
• Taxation - the statement that the UAE does not levy income tax on individuals, which is why the UAE preset returns zero income taxThe Official Portal of the UAE Government · tax year 2026 · verified 2026-09-01

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Read the guides

For what a tax estimate captures, what it leaves out, and when to check official sources, see Why Tax Calculators Are Estimates and When to Check Official Sources.

To turn this estimate into a take-home figure after deductions, see How to Estimate Take-Home Pay Without Confusing Gross and Net Income.

For how sales tax and VAT/GST are calculated differently from income tax, see VAT, GST, and Sales Tax Calculations Explained With Examples.