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

Your marginal rate is the rate on your next dollar of income, the top bracket you reach. Your effective rate is your total tax divided by your income, which is lower because the early brackets tax part of your income at lower rates. People often quote their marginal rate but actually pay the lower effective rate overall.

Why is FICA separate from federal income tax?

Because they fund different things and follow different rules. Federal income tax goes to general government and uses brackets after deductions. FICA funds Social Security and Medicare, is a flat percentage on wages with no standard deduction, and Social Security stops at a wage cap. Both are federal, but only income tax uses the brackets.

How does a 401(k) lower my federal income tax?

A traditional 401(k) contribution is taken out before income tax is calculated, so it reduces your taxable income dollar for dollar. At a 22 percent marginal rate, a $10,000 contribution cuts federal income tax by about $2,200. It does not reduce Social Security or Medicare, which are charged on your full wages.

Does this include my state income tax?

No, this is federal income tax and FICA only. State income tax is separate and varies widely, from zero in states like Texas and Florida to over 13 percent at the top in California. Use the state paycheck calculators to estimate the state portion of your tax.

Federal Income Tax Calculator

Estimate your 2026 federal income tax and FICA: taxable income after the standard deduction, the tax from the brackets, Social Security, Medicare, and your effective and marginal rates.

Your federal income tax is figured on taxable income, which is your income minus pre-tax contributions and the standard deduction, run through the 2026 tax brackets. On top of that, FICA takes 6.2 percent for Social Security and 1.45 percent for Medicare. This calculator estimates your federal income tax, FICA, total federal tax, and your effective and marginal rates.

X f in

Total federal tax (income + FICA)

$14,890.00

Federal income tax plus Social Security and Medicare.

Federal income tax: $8,770.00
Taxable income: $63,900.00
Social Security: $4,960.00
Medicare: $1,160.00
Additional Medicare: $0.00
Total FICA: $6,120.00
Effective tax rate: 18.61%
Marginal tax rate: 29.65%
After-tax income: $65,110.00

Assumptions

Estimates are for the 2026 federal tax year. Taxable income is your income minus any pre-tax contributions minus the standard deduction ($16,100 single, $32,200 married filing jointly, $24,150 head of household, the 2026 amounts). Itemized deductions are not modeled.
Federal income tax is computed by running taxable income through the 2026 marginal brackets (10 to 37 percent) for your filing status. The effective rate is total federal tax over gross income; the marginal rate is the rate on your next dollar.
FICA is the employee share: 6.2 percent Social Security up to the 2026 wage base of $184,500, 1.45 percent Medicare on all wages, and an extra 0.9 percent Medicare on wages above $200,000 ($250,000 married filing jointly).
A traditional 401(k) contribution lowers income tax but not FICA. Other pre-tax deductions (Section 125 health or HSA) lower both. After-tax income is gross minus pre-tax contributions minus federal income tax and FICA, before any state tax.
Not modeled: state and local income taxes, tax credits (Earned Income, Child Tax, education, and others), itemized deductions, the Alternative Minimum Tax, the qualified business income deduction, capital gains and qualified dividend stacking, and self-employment tax. This models wage income taxed at ordinary rates.
This is an estimate for educational purposes only, not tax advice. Confirm current figures with the IRS or a tax professional.

How it works

Federal taxes on wages come in two separate pieces that follow different rules: income tax and FICA.

Federal income tax is figured on taxable income, not gross income. Taxable income is your income minus any traditional 401(k) and other pre-tax deductions minus the standard deduction ($16,100 single, $32,200 married filing jointly, $24,150 head of household for 2026). That figure runs through the 2026 marginal brackets, which rise from 10 percent to 37 percent. Marginal means each bracket taxes only the slice of income inside its range, so a higher bracket never raises the tax on the income below it.

FICA funds Social Security and Medicare. It is a flat tax on wages with no standard deduction: 6.2 percent Social Security up to the 2026 wage base of $184,500, 1.45 percent Medicare on all wages, and an extra 0.9 percent Medicare on wages above $200,000 ($250,000 married filing jointly).

Your effective rate is total federal tax divided by gross income; your marginal rate is the rate on your next dollar, which is your top income-tax bracket plus Medicare, plus Social Security if you are still under the wage base. The effective rate is always lower than the marginal rate because the early brackets tax part of your income at lower rates.

Worked example

Take a $80,000 salary, single, no pre-tax deductions, for 2026.

Taxable income: $80,000 minus the $16,100 standard deduction = $63,900.
Income tax: 10% of $12,400 + 12% of $38,000 + 22% of $13,500 = $1,240.00 + $4,560.00 + $2,970.00 = $8,770.00.
FICA: 6.2% of $80,000 ($4,960) + 1.45% of $80,000 ($1,160) = $6,120.00.
Total federal tax: $8,770 + $6,120 = $14,890, an effective rate of about 18.61 percent.

The marginal rate here is 29.65 percent: the 22 percent income-tax bracket plus 1.45 percent Medicare plus 6.2 percent Social Security. Notice the effective rate (about 19 percent) is far below the marginal rate, which is why quoting your bracket overstates what you actually pay.

Scope and limitations

Federal income tax and FICA only, for 2026, using the standard deduction. Not modeled: state and local income taxes, tax credits (Earned Income, Child Tax, education, and others), itemized deductions, the Alternative Minimum Tax, the qualified business income deduction, capital gains and qualified dividend stacking, and self-employment tax. This models wage income taxed at ordinary rates. This is an estimate for education, not tax advice; confirm current figures with the IRS.

Sources

Frequently asked questions

What is the difference between my effective and marginal tax rate?: Your marginal rate is the rate on your next dollar of income, the top bracket you reach. Your effective rate is your total tax divided by your income, which is lower because the early brackets tax part of your income at lower rates. People often quote their marginal rate but actually pay the lower effective rate overall.
Why is FICA separate from federal income tax?: Because they fund different things and follow different rules. Federal income tax goes to general government and uses brackets after deductions. FICA funds Social Security and Medicare, is a flat percentage on wages with no standard deduction, and Social Security stops at a wage cap. Both are federal, but only income tax uses the brackets.
How does a 401(k) lower my federal income tax?: A traditional 401(k) contribution is taken out before income tax is calculated, so it reduces your taxable income dollar for dollar. At a 22 percent marginal rate, a $10,000 contribution cuts federal income tax by about $2,200. It does not reduce Social Security or Medicare, which are charged on your full wages.
Does this include my state income tax?: No, this is federal income tax and FICA only. State income tax is separate and varies widely, from zero in states like Texas and Florida to over 13 percent at the top in California. Use the state paycheck calculators to estimate the state portion of your tax.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Capital Gains Tax Explained: Long-Term vs Short-Term Rates for 2026

Last reviewed June 2026.