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Tax

Marginal Tax Rate

The tax rate applied to your last (highest) dollar of income — the rate on additional earnings.

What does marginal tax rate mean?

In a progressive system, income is taxed in brackets, so only the portion above each threshold is taxed at the higher rate. Your marginal rate matters for decisions at the margin, like a raise or a deduction.

Put it to use
Marginal Tax Rate Calculator (Tax Year 2017) Use this calculator to determine your marginal and effective tax rates for tax year 2017. This calculator sorts through the tax brackets and filing options to calculate your true tax liability.
Related terms
Effective Tax RateTaxable Income
All glossary terms