How it works
Income tax uses marginal brackets: you don't pay one flat rate — each slice of income is taxed at its own rate. Only income above each threshold gets the higher rate.
Example (US single): the first $11,925 is taxed at 10%, the next chunk at 12%, and so on. Your effective rate (total tax ÷ income) is always lower than your marginal rate (the bracket your last dollar falls in).
Frequently asked questions
Why is my effective rate lower than my bracket?
Brackets are marginal — lower slices of your income are taxed at lower rates. A '22% bracket' earner typically pays ~15% effective federal tax.
Does this include state tax?
No — US states add 0–13% more. The UK figure is income tax only (National Insurance is separate).
Standard deduction?
Not applied here. For 2025 it's $15,000 (US single) — real taxable income is lower, so real tax is lower too.