Marginal Tax Rate: What It Is and How to Calculate It

Due to the progressive tax system in the U.S., your income typically isn't taxed at a single rate. Instead, parts of your taxable earnings can fall into different brackets, with each chunk being taxed at a different rate. Most people fall into a few tax brackets, not just one.

A marginal tax rate refers to the tax rate paid on the last dollar of taxable income. It equates to the rate associated with your highest tax bracket.

Say you’re a single taxpayer who makes $60,000 in taxable income in 2024. In this scenario, parts of your income fall into three different tax brackets: 10%, 12% and 22%. Only the amount over $47,150 would be taxed at 22% — making this your highest tax rate, or marginal tax rate.

Filing status also comes into play when determining your marginal tax rate. That’s because there are different tax brackets and rates for each filing status.

For example, single taxpayers can make up to $100,525 and see a highest tax rate of 22%. Those married filing jointly, however, can make up to $201,050 and still fall within that 22% marginal rate.

» MORE: See the 2024 tax brackets and rates

Fill in the fields below to determine your marginal tax rate for the 2023 or 2024 tax year.

While marginal tax rate refers to your highest tax bracket, effective tax rate is the actual percentage of your income that is taxed. This is sometimes referred to as your average tax rate.

You can determine your effective tax rate by dividing your total taxes owed (line 24 of your Form 1040) by your taxable income (line 15). You can also figure your effective tax rate using our tax calculator.

A flat tax is when all the income you earn is taxed at the same percentage. Whether you make $100 or $1 million in taxable income during the year, each dollar is taxed the same. This differs from the federal progressive tax model but is sometimes seen in the U.S. in state-level income tax.

» Learn more: State income tax rates for 2024

Reducing your marginal tax rates means reducing your taxable income — and there are many strategies you can use to do so. Keep in mind that some methods require itemizing on your return, which isn’t right for everyone.

Some popular ways to reduce your marginal tax rate include:

• Contributing to a 401(k) or traditional IRA.

• Making charitable contributions.

• Contributing to an HSA or FSA. 

• Deducting qualified medical expenses.