Marginal rate is the rate on your next dollar earned. Effective rate is the average rate across all your income. Because tax systems use brackets, your effective rate is always lower than your marginal rate.

When evaluating a raise, side gig or investment, the marginal rate is what matters — that's what you pay on the new money. When budgeting take-home pay, use the effective rate.

Slabs and standard deductions change yearly. This calculator uses the most recent published values for each regime and should not replace advice from a qualified tax professional.