Pay Raise Calculator: Your Raise After Taxes

Why a raise is smaller after taxes

Every dollar of a raise is taxed at your marginal rate — the rate on your top dollars — not your average rate. For a single filer earning $75,000, that's the 22% federal bracket, plus 7.65% for Social Security and Medicare, plus state income tax where it applies. So a $3,750 raise (5% of $75,000) adds about $2,638 a year in a state with no income tax: you keep roughly 70 cents of each raise dollar.

State tax moves the number meaningfully. The same 5% raise keeps about $2,436 in New York and $2,332 in California, because those states tax the extra income at 5.9% and 8–9.3% respectively at this level. The calculator computes the full take-home before and after the raise and subtracts, so if a raise pushes part of your income into a higher bracket, that's captured exactly.

A raise never lowers your take-home

A persistent myth says a raise can 'push you into a higher bracket' and cost you money. Federal and state brackets are marginal: only the dollars above a threshold are taxed at the higher rate, and your existing income is taxed exactly as before. A raise always increases take-home pay. The genuine exceptions are benefit phase-outs — the Earned Income Tax Credit, marketplace health insurance subsidies, some childcare and student-loan programs — which can reduce benefits as income rises. If you're near one of those lines, check the program rules; the tax brackets themselves are never the problem.

Using the number in a negotiation

Negotiate in gross terms — that's how employers think and how offers are written — but decide in net terms. If you're weighing a raise against a move, a title change or better benefits, convert each option to annual take-home. A 4% raise with a state relocation can be worth less than a 2% raise at home; an employer covering your full health premium can be worth more than a few thousand in salary because premiums are paid with pre-tax dollars. The extra-per-paycheck figure is also the number to plan with: it's what actually shows up on payday.

Inflation is the other benchmark. A raise that matches inflation keeps your purchasing power flat; anything less is a real-terms pay cut, even though the nominal number went up.

Common mistakes this calculator helps you avoid

• ✕Applying your effective tax rate to the raise. The raise is taxed at your marginal rate, which is higher — use the full before-and-after comparison.
• ✕Forgetting state tax. In high-tax states the state takes 5–10% of every raise dollar on top of federal and FICA.
• ✕Comparing a raise to a job offer in another state on gross pay. Convert both to take-home first.
• ✕Treating a cost-of-living adjustment as a raise. If it only matches inflation, your purchasing power is unchanged.
• ✕Spending the whole raise. Directing half of every raise to savings before it hits checking is the easiest savings habit there is.

Key terms

Marginal tax rate

The rate applied to your next dollar of income — the rate that applies to a raise.

Effective tax rate

Total tax divided by total income; always lower than the marginal rate.

COLA

Cost-of-living adjustment — a raise intended to offset inflation rather than reward performance.

Merit increase

A raise tied to performance, typically awarded in an annual review cycle.

Frequently asked questions