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.
How much of a raise do you actually keep after tax?
This tool does not estimate: it calculates your full take-home pay at your old salary, then again at the new one, and the difference is what the raise actually adds to your pocket. Because the raise sits on top of your existing income, that difference is automatically taxed at the real combined federal, payroll, and state rate it stacks into, no rule of thumb and no guessed rate, so the result is the exact kept amount for your situation, not a rounded approximation. Most raise calculators reach for a shortcut instead: take your raise and multiply by one minus your tax rate, usually your average rate, which is the wrong rate and overstates what you keep.
What shrinks a raise besides taxes?
After taxes, two more things shrink the felt value of a raise, and they are different in kind, so the tool keeps them apart instead of blending them into one vague number. The first is lifestyle creep: if your spending rises along with your income, part of the raise simply funds a higher baseline rather than improving your life, and you can set how much. The second is inflation: a dollar next year buys a little less than a dollar today. Showing these separately matters because they answer different questions. Lifestyle creep is about your choices. Inflation is about the dollar. Blended together they hide which one is actually eating your raise, and only one of them is in your control.
One thing this never means: that a raise is not worth taking. It always is. Your take-home only goes up, and no tax bracket ever costs you money. This is about how much of the raise becomes a lasting gain, not whether to accept it.
A snapshot, not a forecast
This tool answers what your raise is worth now, this year, rather than projecting your salary out 10 or 20 years into a big compounded number that depends on assumptions no one can actually make. The same applies to a bonus: the tool values it with the same real tax math as a raise, showing what you truly keep rather than the flat supplemental rate your paycheck withholds, which you reconcile at tax time anyway.
Two things that quietly change the number
Where you live matters more than people expect. The same raise keeps a different amount depending on your state. In a no-income-tax state like Texas or Florida, your raise is taxed only at the federal and payroll level. In a high-tax state like California, state income tax takes another slice off the top, so the same gross raise lands smaller in your account. The tool uses your actual state, so the kept amount already reflects this, but it is worth knowing why a friend in another state keeps more of an identical raise.
The other quiet reducer is your own 401(k). If your plan has automatic contribution increases, a raise can trigger a higher contribution rate, which is good for your future but means even less of the raise shows up in your paycheck now. That is saving, not loss, but it explains why the visible bump can feel smaller than expected. Either way, taking the raise always leaves you ahead.
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.