What a Raise Really Adds to Take-Home
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The short answer
A raise is taxed at your marginal rate, which is the rate on your last dollar of income — not your effective rate, and not the rate that applies to your whole salary. At $60,000 single, taxable income is $43,900 after the 2026 standard deduction of $16,100, which sits in the 12% bracket. Adding $5,000 keeps you in the same bracket, so the extra tax is a straightforward $5,000 × 12% = $600, and you keep $4,400.
The common fear — "a raise will push me into a higher bracket and I'll take home less" — is almost always false. Brackets are marginal. Moving into the 22% bracket means only the dollars above the threshold are taxed at 22%; everything below keeps its lower rate. You cannot lose money by earning more through the bracket structure alone.
How the calculation works
Taxable income is income minus the standard deduction ($16,100 single, $32,200 joint for 2026). The tool computes federal income tax before and after the raise using the 2026 bracket schedule, then subtracts each from gross pay to show take-home. The difference between the two take-home figures is what actually lands in your bank account.
What this tool covers — and what it does not
- Federal income tax only. No state or local income tax is included. In a high-tax state, add roughly your state marginal rate to the federal figure to get the real cost of the raise.
- No FICA. Social Security is 6.2% on wages up to the $184,500 wage base and Medicare is 1.45% with no cap, plus an additional 0.9% Medicare surtax above $200,000 single / $250,000 joint. A raise below the wage base also increases FICA, so your true take-home gain is a little smaller than shown.
- No credits or phase-outs. A raise can reduce or eliminate credits that phase out with income — the Earned Income Credit, education credits, and the child tax credit in some ranges. Where a phase-out applies, the effective cost of a raise can be far higher than your bracket. This is the one situation where the "a raise made me worse off" worry has real substance, and this tool does not model it.
- No changes to withholding. What is withheld and what you owe are different things. A raise may not change your W-4 settings enough to cover the extra tax.
Worked examples
| Case | Tax before | Tax after | Extra tax | You keep | Marginal |
|---|---|---|---|---|---|
| Single, $60,000 + $5,000 raise | $5,020 | $5,620 | $600 | $4,400 | 12% |
| Single, $90,000 + $10,000 raise | $10,970 | $13,170 | $2,200 | $7,800 | 22% |
| Joint, $150,000 + $10,000 raise | $15,340 | $17,540 | $2,200 | $7,800 | 22% |
| Single, $250,000 + $20,000 raise | $51,304 | $57,704 | $6,400 | $13,600 | 32% |
The middle two rows are worth comparing: a single filer at $90,000 and a joint filer at $150,000 pay exactly the same extra tax on a $10,000 raise, because both are in the 22% bracket. Filing status moves the bracket thresholds; it does not change the arithmetic once you are in one.
What to do with the number
- Find your marginal rate first — the raise is taxed at that rate, not your effective rate.
- Add your state rate and FICA (7.65% below the Social Security wage base) for the real figure.
- If you receive means-tested benefits or credits that phase out with income, check the phase-out before accepting the arithmetic above.
- Adjust your W-4 if the raise changes your withholding enough to create a shortfall — a bigger paycheque with unchanged withholding can still produce a bill in April.
- Negotiate on the after-tax figure. A $5,000 raise is a $4,400 raise in practice at the 12% bracket.
Frequently asked questions
Can a raise leave me with less take-home pay?
Not through the bracket structure — brackets are marginal, so only the dollars above a threshold are taxed at the higher rate. It can happen through benefit or credit phase-outs, which this tool does not model.
Why is the extra tax less than my bracket suggests?
Because part of the raise may fall in a lower bracket than the top of your income. When the entire raise stays inside one bracket, the extra tax is exactly that bracket's rate applied to the raise.
Does this include Social Security and Medicare?
No. Social Security is 6.2% up to the $184,500 wage base and Medicare is 1.45% with no cap. Below the wage base, add 7.65% to the federal figure for the true cost.
Does state tax change the answer?
Yes, and materially. This tool is federal only. Add your state's marginal rate to see the full effect, or use the state income tax estimator.
My raise also changed my withholding — is that the same thing?
No. Withholding is an estimate collected during the year; your actual tax is computed on the return. A raise can move you into a withholding band that over- or under-collects.
Are these 2026 brackets?
Yes — IRS Rev. Proc. 2025-32, standard deduction $16,100 single / $32,200 joint. Figures as of 2026-08-09.
Sources
- IRS Rev. Proc. 2025-32 — 2026 inflation adjustments (brackets, standard deduction). Retrieved 2026-08-09.
- IRS Pub. 15 (Circular E), Employer's Tax Guide 2026 — Social Security wage base $184,500. Retrieved 2026-08-09.
- IRS Pub. 15-T (2026) — federal income tax withholding methods. Retrieved 2026-08-09.
- IRS Schedule A (Form 1040) — itemized deductions. Retrieved 2026-08-09.
Figures as of 2026-08-09. FiscTalk provides educational estimates only. This is not tax, legal, or financial advice — confirm any consequential figure with a licensed CPA, EA, or the IRS publication cited.