Income Tax Calculator
A raise never leaves you worse off. Here is why.
Work out Income Tax. A raise never leaves you worse off. Here is why. States the assumption instead of hiding it.
Income tax due
7,486.00
14.97% effective · 20% marginal
The distinction this page exists to make is between the marginal rate and the effective rate. Moving into a higher band taxes only the income above the threshold at the higher rate, not all of it — and the belief that it does causes people to turn down raises and overtime. The effective rate is always well below the marginal rate in a progressive system with an allowance. Someone on a 40% marginal rate typically pays somewhere in the twenties overall, because the allowance and the lower band come first. Some jurisdictions taper the allowance away at higher incomes, which creates a band where the marginal rate spikes far above the headline figure. That is not modelled here, and it is worth checking if your income sits near such a threshold.
How the Income Tax Calculator works
Progressive income tax across bands you supply, with the marginal and effective rates side by side. Moving into a higher band taxes only the income above the threshold — not all of it.
Also known as: will a raise push me into a higher bracket · marginal versus effective tax rate · how much tax on 50000 · tax bands calculator
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
Does a raise into a higher band leave me worse off?
No. Only the income above the threshold is taxed at the higher rate. The belief that all of it is taxed higher is wrong in every ordinary progressive system, and it makes people turn down money.
What is the difference between marginal and effective rate?
Marginal is the rate on your next pound; effective is the total tax divided by total income. Someone on a 40% marginal rate typically pays somewhere in the twenties overall.
Why are the bands inputs rather than built in?
Because they change every year and differ by jurisdiction. A calculator asserting last year's thresholds gives a confidently wrong answer, which is worse than asking.
Are there cases where a raise does hurt?
A few, where an allowance is withdrawn or a benefit is means-tested at a threshold. Those create effective marginal rates far above the headline figure, and they are not modelled here.
Does this include national insurance or social security?
No — this is income tax only. Those are separate charges with their own thresholds and rates, and adding them here without knowing your jurisdiction would produce a number that fits nowhere.
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