How Much of Your Raise You Actually Keep After Taxes

A raise always increases your take-home pay, but by less than the raise itself. Every extra dollar is taxed at your marginal rate, the rate on your top dollars of income, plus Social Security and Medicare, plus state income tax in most states. For a single filer earning $75,000 in a state with no income tax, a 5% raise is $3,750 a year before tax and about $2,638 after tax. That's 70% of the raise, or about $101.47 more per biweekly paycheck.

This guide shows how much of a raise you keep at different salaries and in different states using 2026 tax rates, explains why the share you keep varies, clears up the myth that a raise can push you into a bracket that costs you money, and shows how to compare a raise with inflation and with an outside job offer. Our pay raise calculator does all of this for your exact salary, state and pay schedule.

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Why a raise is taxed more heavily than your average

Your effective tax rate, total tax divided by total income, is lower than your marginal rate because the standard deduction and the lower brackets apply to your first dollars. A raise sits on top of everything else you earn, so it's taxed entirely at the marginal rate. At $75,000, a single filer's effective federal income tax rate is about 10.2%, but every dollar of a raise is taxed at 22%.

Add 7.65% for Social Security and Medicare and the federal cost of each raise dollar is 29.65 cents in the 22% bracket. In the 12% bracket, it's 19.65 cents. In the 24% bracket, it's 31.65 cents. State income tax adds anywhere from 0 to more than 9 cents. That's why a raise usually keeps 60% to 80% of its face value, even though your overall take-home pay is 75% to 85% of your gross salary.

High earners see one exception. Once your wages pass the 2026 Social Security wage base of $184,500, the 6.2% Social Security tax stops, so a raise above that level loses only 1.45% (or 2.35% above $200,000) to payroll tax. A raise that crosses the wage base can be taxed more lightly than the salary below it.

How much you keep at different salaries

The table shows the raise and the after-tax amount you keep for 3%, 5% and 10% raises at six salaries, for a single filer with no state income tax and no pre-tax deductions. Two patterns stand out. The share you keep falls as salary rises, because the raise lands in higher brackets. And it's fairly stable within a bracket: anyone whose raise stays inside the 22% bracket keeps about 70% of it before state tax.

Dollar amounts matter more than percentages for budgeting. A 3% raise on $50,000 adds about $100 a month after tax. A 10% raise on $100,000 adds more than $560 a month. If you're deciding what to do with a raise, look at the monthly after-tax figure, not the headline percentage.

The same raise in different states

State income tax changes how much of a raise you keep more than anything else. The table shows a 5% raise on $75,000 for a single filer in nine states. In Texas, with no income tax, you keep about $2,638. In states with flat taxes, such as Colorado, Illinois and North Carolina, the state takes its flat rate from every raise dollar. In graduated states such as California and Oregon, the raise lands in a high state bracket, so the state takes a bigger share of the raise than of your salary overall.

Local income taxes come on top where they apply. A New York City resident loses roughly another 3.8% of each raise dollar to city tax, and most Pennsylvania municipalities take another 1% or more. Our state paycheck calculators include these local notes for every state.

The bracket myth: can a raise cost you money?

No. Moving into a higher tax bracket only raises the tax on the dollars above the threshold. A single filer earning $65,500 is $1,000 below the top of the 12% bracket. A $3,000 raise puts $1,000 of it in the 12% bracket and $2,000 in the 22% bracket. Take-home pay still rises by about $2,211, and the tax on the rest of their salary doesn't change at all.

Where a raise really can leave you worse off is with means-tested benefits that end abruptly at an income limit, such as some housing, child care or health subsidies, and in the phase-out ranges of certain credits. The Earned Income Tax Credit shrinks gradually as income rises, which raises the effective marginal rate on a raise for lower-income workers, but it doesn't create a cliff. If you receive income-based benefits, check their limits before you accept a small raise, and ask whether part of it can go into a pre-tax account instead.

What a raise means for each paycheck

Most employers pay raises starting with a specific pay period, so the first full check at the new rate is the best place to see the change. Divide the after-tax raise by your number of paychecks: a $2,638 after-tax raise is $101.47 per biweekly check, $109.92 per semimonthly check, and $219.84 per monthly check.

Your withholding adjusts automatically. Employers calculate federal withholding from your current pay each period, so a raise is withheld at the right marginal rate from the first check. You don't need a new W-4 for a raise alone. If the raise comes with a retroactive lump sum for past pay periods, that lump sum may be withheld at the flat 22% supplemental rate, which can be more or less than you'll actually owe on it.

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Raises and your 401(k)

If you contribute a percentage of pay to a 401(k), your contribution rises automatically with a raise. At 6% of pay, a $3,750 raise on $75,000 adds $225 to your yearly contribution, and because that $225 comes out before income tax, your take-home pay rises by about $2,463 instead of $2,638. Your employer match usually rises with it.

A raise is the easiest time to increase your contribution rate, because you never see the money in your paycheck first. Raising your 401(k) rate by one percentage point each time you get a raise lets savings grow without your take-home pay ever going down. Some plans offer automatic annual increases that do this for you.

Is your raise beating inflation?

A raise only increases your buying power if it's bigger than inflation. To find your real raise, divide 1 plus your raise by 1 plus the inflation rate and subtract 1. A 3% raise in a year with 2.9% inflation is a real raise of about 0.10%. A 2% raise in the same year is a pay cut in real terms.

Taxes affect this comparison too. The federal brackets and standard deduction rise each year with inflation, so a raise that exactly matches inflation keeps your tax rate roughly the same. Social Security's wage base rises with average wages. State brackets are inflation-adjusted in some states and not in others; where they aren't, a cost-of-living raise slowly pushes you into higher state brackets.

Comparing a raise with a job offer

When you're weighing a raise at your current job against an offer elsewhere, compare after-tax pay and the full package, not the headline salaries. A $10,000 higher offer in a different state may be worth much more or much less after state income tax and cost of living. A move from Texas to California at the same salary costs several thousand dollars a year in state income tax before rent is considered.

Then add benefits: the employer's share of health premiums, the 401(k) match, paid time off and any bonus. A raise that comes with a promotion to a salaried, overtime-exempt role can pay less per hour than your old job if your hours rise. Our salary to hourly calculator shows your effective hourly rate at your real weekly hours.

Compare take-home pay in two states →

How to ask for a raise with numbers

Asking in after-tax terms rarely helps, because employers budget in gross pay. Decide on the after-tax amount you need, then use a net to gross calculation to turn it into a gross raise. If you need an extra $300 a month after tax in the 22% bracket with no state tax, you need roughly $300 ÷ (1 − 0.2965) = $426 a month, or about $5,100 a year, in gross pay.

Back the request with market data for your role, a record of results, and any responsibilities you've taken on since your last raise. Typical annual merit increases in the US run around 3% to 4%; promotions and job changes often bring 10% or more. If the budget for base pay is fixed, ask about a one-time bonus, a higher 401(k) match, extra paid time off or a title change with a pay review date.

Turn a take-home target into a gross raise →

Bonuses vs. raises

A one-time bonus and a raise of the same amount are taxed the same in the end, because both are wages. The difference is in withholding and in the long run. Bonuses paid separately are usually withheld at a flat 22% federal rate, so in the 12% bracket you'll get some of it back at tax time, and in the 24% bracket or above you may owe a little more. A raise is withheld through your normal paycheck at your actual rate.

Over time, a raise is worth far more than a bonus of the same size because it repeats every year and future raises are calculated on top of it. A $3,000 raise received at 30 and kept through a career, with 3% annual increases, adds well over $100,000 in total earnings by 60. A $3,000 bonus is worth $3,000.

Raises for hourly workers

Hourly raises are usually quoted per hour, so convert them to a year first. A $1.50-an-hour raise at 40 hours a week is $1.50 × 2,080 = $3,120 a year before tax. In the 12% bracket with no state tax you keep about 80.35% of it, or about $2,507 a year, roughly $96 more per biweekly check. If you work regular overtime, the raise also lifts your overtime rate by 1.5 times the raise, so it's worth more than the base calculation shows.

For part-time or variable hours, multiply the hourly raise by your average weekly hours and by 52. If your hours drop after a raise, as sometimes happens when an employer is managing labor costs, your total pay can stay flat or fall even though your rate went up. Track total pay, not just the rate.

Convert an hourly raise to a yearly amount →

Cost-of-living adjustments vs. merit raises

A cost-of-living adjustment (COLA) is meant to keep pay level with prices and is usually given to everyone at the same percentage. A merit raise rewards performance and varies by person. Many private employers combine them into a single annual increase, which is why a 3% raise can be mostly a COLA in a 3% inflation year. Government employees, retirees on Social Security and some union contracts receive formal COLAs separately from merit or step increases.

When you evaluate a raise, separate the two in your head. The part above inflation is your real gain. If your raise only matches inflation, your buying power and your effective tax rate stay about the same as last year.

What to do with a raise

Because a raise increases take-home pay gradually, it's easy for it to disappear into everyday spending. A simple rule is to decide in advance where the after-tax increase goes: part to savings or debt payments, part to your budget. Raising your 401(k) contribution rate by a point or two, or setting up an automatic transfer to savings equal to the after-tax raise, captures it before you get used to spending it.

If you have high-interest debt, the after-tax raise is often best spent paying it down. A $200-a-month after-tax raise put toward a credit card at 24% interest saves far more than it would earn in a savings account.

Calculate your raise

The pay raise calculator shows your raise after federal, Social Security, Medicare and state taxes per year and per paycheck, for a percentage, a dollar amount or a new salary. Your state's paycheck calculator shows your full paycheck at the new salary, and the tax bracket calculator shows whether the raise crosses into a new bracket.

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