How to use it
- Use the formula below with your own figures.
The formula
Tax applies in bands to portions of income.
Worked example
Only income within each band is taxed at that band's rate.
Frequently asked questions
Marginal vs effective?
Marginal is your top band; effective is the overall average.
Are rates current?
Confirm local rates — they change yearly.
Tips
- Know your marginal vs effective rate.
- Set money aside as you earn if tax isn't withheld.
- Keep receipts for anything deductible.
Key terms
- Marginal rate
- The rate on your top slice of income.
- Effective rate
- Your overall average tax rate.
- Deduction
- An amount subtracted from taxable income.