How federal income tax is calculated
The U.S. federal income tax is progressive: your income is sliced into bands, and each band is taxed at its own rate. A common misconception is that moving into a higher bracket taxes all your income at that rate — it doesn't. Only the dollars that fall inside a bracket are taxed at that bracket's rate.
Before any of that, you subtract the standard deduction from your gross income to get your taxable income. For 2026 the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
2026 federal tax brackets
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 |
| 12% | $12,400 – $50,400 | $24,800 – $100,800 |
| 22% | $50,400 – $105,700 | $100,800 – $211,400 |
| 24% | $105,700 – $201,775 | $211,400 – $403,550 |
| 32% | $201,775 – $256,225 | $403,550 – $512,450 |
| 35% | $256,225 – $640,600 | $512,450 – $768,700 |
| 37% | $640,600+ | $768,700+ |
FICA: Social Security and Medicare
On top of income tax, your paycheck pays the FICA payroll tax. In 2026, Social Security is 6.2% on the first $184,500 of earnings, and Medicare is 1.45% on all earnings — plus an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly). Your employer matches the Social Security and Medicare portions; the figure here is your share.
Marginal vs. effective rate
Your marginal rate is the rate on your last dollar earned — the top bracket you reach. Your effective rate is total tax divided by income, and it's always lower because your first dollars are taxed at 10% and 12%. Someone in the 22% bracket often has an effective federal rate closer to 12%–15%.
A quick example
A married couple filing jointly on $150,000 in 2026 subtracts the $32,200 standard deduction, leaving $117,800 of taxable income. That falls across the 10%, 12%, and 22% brackets for about $15,340 in federal income tax — an effective federal income-tax rate near 10% — while FICA adds roughly $11,475 more, leaving about $123,185 in take-home before any state tax.
Frequently asked questions
How is federal income tax calculated?
The U.S. uses progressive brackets, so different slices of your income are taxed at different rates. You first subtract the standard deduction from your gross income to get taxable income, then apply the 10%, 12%, 22%, 24%, 32%, 35%, and 37% rates to the portions of income that fall in each bracket. Only the income inside a bracket is taxed at that bracket's rate.
What is the difference between marginal and effective tax rate?
Your marginal rate is the rate on your next dollar of income — the top bracket you reach. Your effective rate is your total tax divided by your income, which is always lower because the early brackets tax part of your income at 10% and 12%. The calculator shows both.
What is FICA and how much is it?
FICA is the payroll tax for Social Security and Medicare. In 2026, Social Security is 6.2% on earnings up to $184,500, and Medicare is 1.45% on all earnings, with an extra 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly). Employers match the Social Security and Medicare portions; this tool shows the employee share.
Does this include state income tax?
No. This calculator estimates federal income tax and FICA only. State and local income taxes vary widely — from zero in states like Texas and Florida to over 10% at the top in California — so add your state's rate separately for a full picture.
How does the standard deduction work?
The standard deduction is a flat amount subtracted from your income before tax is figured, so that portion is tax-free. For 2026 it is $16,100 for single filers and $32,200 for married couples filing jointly. Most filers take it rather than itemizing.
Why is my take-home pay lower than my salary?
Your gross salary is reduced by federal income tax, the Social Security and Medicare payroll taxes, and any pre-tax deductions like 401(k) or health premiums — plus state tax where it applies. The calculator subtracts federal income tax and FICA to estimate your net pay.
Sources & freshness: The 2026 federal tax brackets and standard deduction come from the IRS 2026 inflation adjustments (Rev. Proc. 2025-32), and the Social Security wage base from the SSA Contribution & Benefit Base. Figures last verified June 2026 by the CalcQuill editorial team.
Disclaimer: This is a simplified estimate for the 2026 tax year using federal figures only. It does not include state or local taxes, tax credits, itemized deductions, the Additional Medicare Tax thresholds for other filing statuses, or other adjustments. It is not tax advice — consult a qualified professional for your specific situation.