Taxes & Income · Glossary
Effective tax rate
Also called: Average tax rate
The share of your total income that goes to federal income tax — your total tax divided by your income. It's always lower than your top bracket.
Because the U.S. taxes income in brackets, only the dollars in your top bracket are taxed at your top rate. Your effective rate blends every bracket together, and the standard deduction lowers it further.
Some people measure it against taxable income and others against total (gross) income. Our calculators divide your federal income tax by your gross income, which is the more useful number for budgeting.
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Disclaimer: Definitions are general education, not financial, tax, or legal advice. Figures are for the 2026 tax year unless noted.