What is your raise really worth?
Everyone tells you a raise is taxed at your marginal rate. True, but that's only half the story. The real question is how much of it stays a genuine improvement once your spending creeps up with your income and prices keep rising. Here's the honest number.
In short
Updated for tax year 2026 · June 2026You keep less of a raise than your average tax rate suggests, because the raise stacks on top of your income and gets taxed at your marginal rate. After lifestyle creep and inflation, only part of it becomes a lasting improvement. Taking the raise is always worth it. This just shows how much of it is real.
Common questions
How much of a raise do you actually keep?⌄
Your raise is taxed at your marginal rate, which is higher than your average rate, so you keep less than your overall tax rate suggests. On a 10,000 dollar raise in the 22 percent bracket, payroll tax included, you keep roughly 7,000 dollars before any state tax.
Does a raise ever leave you worse off?⌄
No. A raise always increases your take-home, and no tax bracket is ever above 100 percent. Only the dollars above the bracket line are taxed at the higher rate. Taking the raise is always worth it.
What is lifestyle creep doing to my raise?⌄
If your spending rises with your income, part of the raise just funds a higher baseline instead of building wealth. We assume about half by default and let you adjust it, so you can see how much of the raise stays a real gain.
Built and reviewed by the EverydayBudd editorial team. Every figure on this page is reproduced in automated tests against published IRS data before it ships, and the tax figures use 2026 brackets and limits.