finance ToolUpdated 2026-09-20

Income Tax Calculator

This free income tax calculator evaluates your gross salary against standard tax deductions and progressive marginal tax brackets to calculate your estimated tax liability and actual take-home income.

Formula & Mathematical Methodology

Tax = ∑ (Taxable Income in Bracket × Bracket Rate); Taxable Income = Gross Income - Deductions

Federal tax in the United States is progressive: income is divided into brackets taxed at increasing percentages (10%, 12%, 22%, 24%, 32%, 35%, 37%), rather than your entire income being taxed at the top rate.

Step-by-Step Worked Example

Scenario: Gross salary of $75,000 for a single filer.

1. Subtract standard deduction: $75,000 - $15,000 = $60,000 taxable income.

2. First $11,600 taxed at 10%: $1,160.00.

3. Income between $11,600 and $47,150 ($35,550) taxed at 12%: $4,266.00.

4. Remaining $12,850 ($60,000 - $47,150) taxed at 22%: $2,827.00.

5. Total tax liability: $1,160 + $4,266 + $2,827 = $8,253.00.

6. Effective tax rate: ($8,253 ÷ $75,000) × 100 = 11.00%.

Final Calculated Result: $8,253.00 Federal Tax (11.00% Effective Rate)

Frequently Asked Questions

What is the difference between marginal tax rate and effective tax rate?

Your marginal rate is the tax rate applied to your highest dollar of income. Your effective rate is the overall percentage of your gross income paid in taxes (Total Tax ÷ Gross Income).

Does this calculator include state income taxes or FICA?

This tool specifically computes US Federal personal income tax. State income tax varies by state (from 0% in TX/FL to 13.3% in CA), and FICA social security/medicare tax adds an additional 7.65%.