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Tax bracket calculator

By Jude Wallis

A bracket tax calculation applies each rate only to income inside its band. On the teaching bands here, $60,000 creates $1,200, $4,320 and $2,640 of band tax, for $8,160 total.

Stacked income tax

$8,160.00

$1,200.00 + $4,320.00 + $2,640.00 across the three teaching bands.

Band 1 tax
$1,200.00
Band 2 tax
$4,320.00
Band 3 tax
$2,640.00
$

Amount that enters the teaching stack.

$

First cap. Teaching default is 12,000.

%

Rate on the first slice. 10 here means 10 percent.

$

Second cap. Teaching default is 48,000.

%

Rate on the second slice.

%

Rate above the second cap.

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On this page

Next on Retirement and tax

Effective tax rate

The formula

tax=∑ibandi×ratei\text{tax}=\sum_i \text{band}_i\times\text{rate}_i

Split income across the teaching bands, multiply each band by its own rate, then add the band taxes.

Stack income through the bands

The first $12,000 at 10 percent creates $1,200. The next $36,000 at 12 percent creates $4,320. The last $12,000 at 22 percent creates $2,640. Total tax is $8,160. How tax brackets work explains stacking.

Income that stops in band two

At $40,000, the first band is $12,000 and the second is $28,000. Their taxes are $1,200 and $3,360. Band three is $0 with $0 tax, for $4,560 total.

Teaching bands, not current statute

These thresholds and rates are teaching inputs, not this year's statute. A tax bracket is a slice, and the marginal tax rate is the rate on the last slice. The marginal tax explorer visualises that structure.

Scope of the total

This identity adds tax from three entered bands. Deductions, credits and other taxes are separate from this teaching stack. This is educational material, not financial advice.

Worked examples

\$60,000 through three teaching bands

Income is $60,000. Band 1 caps at $12,000 at 10 percent. Band 2 caps at $48,000 at 12 percent. The remaining band uses 22 percent. What is tax?

  1. Band 1 is $12,000 and tax is 12000(0.10)=120012000(0.10)=1200, so $1,200.
  2. Band 2 is 48000−12000=3600048000-12000=36000, so $36,000, and tax is 36000(0.12)=432036000(0.12)=4320, so $4,320.
  3. Band 3 is 60000−48000=1200060000-48000=12000, so $12,000, and tax is 12000(0.22)=264012000(0.22)=2640, so $2,640.
  4. Total tax is 1200+4320+2640=81601200+4320+2640=8160, so $8,160.

On $60,000, the bands are $12,000, $36,000 and $12,000. Band taxes are $1,200, $4,320 and $2,640, totaling $8,160.

\$40,000 through two teaching bands

Income is $40,000. Band 1 caps at $12,000 at 10 percent. Band 2 caps at $48,000 at 12 percent. The remaining band uses 22 percent. What is tax?

  1. Band 1 is $12,000 and tax is $1,200.
  2. Band 2 is 40000−12000=2800040000-12000=28000, so $28,000, and tax is 28000(0.12)=336028000(0.12)=3360, so $3,360.
  3. Band 3 is $0 and its tax is $0.
  4. Total tax is 1200+3360+0=45601200+3360+0=4560, so $4,560.

On $40,000, the bands are $12,000, $28,000 and $0. Band taxes are $1,200, $3,360 and $0, totaling $4,560.

Applying the top rate to all income

Only income inside a band receives that band's rate. The 22 percent rate in the first case applies to $12,000, not all $60,000.

Common questions

Are these current tax brackets?

No. They are teaching inputs, not this year's statute.

Why is band three zero in the second example?

Income stops below the band 2 cap, so nothing reaches band three.

Is this financial advice?

No. It is educational material for stacked band arithmetic.

Keep reading

This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.