Tax Bracket Calculator

See exactly which tax brackets your income falls into, how much you owe in each, and the difference between your marginal and effective tax rate. Supports Gibraltar, UK, Spain, and the United States.

Marginal vs effective: the difference that ruins half the tax takes on the internet

The single biggest tax misconception in personal finance is the belief that “moving into the next tax bracket” means a pay cut. It doesn't. Almost every income tax system in the world uses a marginal bracket structure: each slice of your income is taxed at the rate for that slice, not your top rate. A raise can never reduce your take-home pay just by pushing you into a higher bracket.

• Marginal rate = the rate on the next pound (dollar, euro) you earn. It's the rate of the highest bracket you've entered.
• Effective rate = total tax ÷ total income. It's the weighted average of all your brackets and is always lower than your marginal rate (except for very low earners).

Worked example: UK, £60,000 income

Under UK PAYE: the first £12,570 is tax-free (personal allowance). The next £37,700 (£12,570 → £50,270) is taxed at 20%, producing £7,540. The remaining £9,730 (£50,270 → £60,000) is taxed at 40%, producing £3,892. Total income tax: £11,432. Effective rate: 19.1%. Marginal rate: 40%. Notice: even though your “tax bracket” is 40%, only about 19p of every pound earned actually goes to income tax. The next pound, however, is taxed at 40p.

Why the bonus calculation matters

When you get a bonus or a raise, you keep 1 minus your marginal rate. At 40% marginal, a £5,000 bonus puts £3,000 in your pocket (ignoring National Insurance, which would reduce that further). At 45% marginal, the same £5,000 gives you £2,750. Knowing your marginal rate is essential when:

• Negotiating compensation — what a raise is really worth to you.
• Pension contributions — pensions in the UK get tax relief at your marginal rate, so contributions become disproportionately valuable as you climb.
• Side income — your first hour of self-employment is taxed at your top bracket, not the bottom.
• Charitable giving — Gift Aid and similar schemes shift the marginal-rate refund to you.

The cliff edges that ARE real

While entering a new tax bracket never reduces take-home, there are real cliff edges in some tax systems that can produce bizarre effective rates for narrow income ranges:

• UK personal allowance taper — for every £2 you earn above £100,000, you lose £1 of personal allowance. Between £100k and £125,140, the effective marginal rate is roughly 62%. (This calculator does not model the taper.)
• UK Child Benefit charge — claws back Child Benefit starting at around £60k income, creating effective marginal rates well above 60% for families with multiple children.
• US Medicare surtaxes and ACA cliffs — additional rates triggered at specific income thresholds.
• Spain's autonomous community variation — the combined IRPF rate depends on where you live, so the “general scale” used here is an average.

These cliffs are why a tax bracket calculator alone can't tell you your true marginal cost of an extra pound earned. For decisions near these thresholds, a qualified accountant is worth their fee.

How to use this calculator

1. Pick your region.
2. Enter your gross annual income.
3. (Optional) Enter a hypothetical raise or bonus to see how much of it you'd keep.

The breakdown table shows every bracket your income touches: how much of your income falls into that bracket, the rate applied, and the resulting tax. Brackets in muted grey contain none of your income.

Disclaimer

Educational only. This calculator handles income tax brackets — it does not include Social Security / NI, regional/state taxes, tax credits, family allowances, the UK personal-allowance taper above £100k, the Spanish Beckham regime, or Gibraltar's Cat 2/3 special status. For an authoritative figure, consult your country's official tax authority or a qualified accountant.