Definition
Your marginal tax rate is the percentage applied to the next dollar of income you earn — often called your 'tax bracket.' Because the U.S. uses a progressive tax system, only the income above each bracket threshold is taxed at that bracket's rate. Income below the threshold is taxed at lower rates.
For example, a single filer with $60,000 of taxable income in 2026 would have a marginal rate of 22% — but the effective (average) rate on all $60,000 would be considerably lower, perhaps 13–14%, because the first $12,100 is taxed at 10% and the next $34,025 at 12%.
Knowing your marginal rate helps you estimate the tax impact of additional income — a $5,000 freelance job taxed at 22% costs roughly $1,100 in federal income tax.
How this affects your W-4
The calculator shows both your marginal rate and effective rate in the results panel. The marginal rate is most useful when estimating how much additional withholding you'll need for extra income (freelance, bonuses, side gigs).
For each $1,000 in additional income in Step 4a, your withholding increases by approximately your marginal rate × $1,000 ÷ pay periods.
See how marginal tax rate affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →Related terms
Effective Tax Rate
The average rate you pay across all your income — always lower than your marginal rate.
Tax Bracket
An income range taxed at a specific rate — income in each bracket is only taxed at that bracket's rate.
Federal Income Tax
The progressive income tax the U.S. federal government levies on wages and other income.