[{"data":1,"prerenderedAt":272},["ShallowReactive",2],{"term:effective-tax-rate":3},{"term":4,"related":259},{"id":5,"title":6,"body":7,"category":241,"description":242,"extension":243,"faq":244,"meta":245,"navigation":246,"path":247,"related":248,"seo":252,"stem":253,"takeaways":254,"__hash__":258},"terms\u002Fterms\u002Feffective-tax-rate.md","Effective Tax Rate",{"type":8,"value":9,"toc":234},"minimark",[10,15,19,22,26,227,231],[11,12,14],"h2",{"id":13},"understanding-effective-tax-rate","Understanding Effective Tax Rate",[16,17,18],"p",{},"Your effective rate equals total tax divided by income. Because of brackets, deductions, and credits, it is lower than your marginal rate.",[16,20,21],{},"It is the better measure of your overall tax burden.",[11,23,25],{"id":24},"formula","Formula",[27,28,31],"span",{"className":29},[30],"katex-display",[27,32,35,79],{"className":33},[34],"katex",[27,36,39],{"className":37},[38],"katex-mathml",[40,41,44],"math",{"xmlns":42,"display":43},"http:\u002F\u002Fwww.w3.org\u002F1998\u002FMath\u002FMathML","block",[45,46,47,74],"semantics",{},[48,49,50,54,58,67,70],"mrow",{},[51,52,53],"mtext",{},"Effective tax rate",[55,56,57],"mo",{},"=",[59,60,61,64],"mfrac",{},[51,62,63],{},"Total tax",[51,65,66],{},"Total income",[55,68,69],{},"×",[71,72,73],"mn",{},"100",[75,76,78],"annotation",{"encoding":77},"application\u002Fx-tex","\\text{Effective tax rate} = \\frac{\\text{Total tax}}{\\text{Total income}} \\times 100",[27,80,84,113,217],{"className":81,"ariaHidden":83},[82],"katex-html","true",[27,85,88,93,101,106,110],{"className":86},[87],"base",[27,89],{"className":90,"style":92},[91],"strut","height:0.6944em;",[27,94,98],{"className":95},[96,97],"mord","text",[27,99,53],{"className":100},[96],[27,102],{"className":103,"style":105},[104],"mspace","margin-right:0.2778em;",[27,107,57],{"className":108},[109],"mrel",[27,111],{"className":112,"style":105},[104],[27,114,116,120,206,210,214],{"className":115},[87],[27,117],{"className":118,"style":119},[91],"height:2.0574em;vertical-align:-0.686em;",[27,121,123,128,202],{"className":122},[96],[27,124],{"className":125},[126,127],"mopen","nulldelimiter",[27,129,131],{"className":130},[59],[27,132,136,193],{"className":133},[134,135],"vlist-t","vlist-t2",[27,137,140,188],{"className":138},[139],"vlist-r",[27,141,145,162,173],{"className":142,"style":144},[143],"vlist","height:1.3714em;",[27,146,148,153],{"style":147},"top:-2.314em;",[27,149],{"className":150,"style":152},[151],"pstrut","height:3em;",[27,154,156],{"className":155},[96],[27,157,159],{"className":158},[96,97],[27,160,66],{"className":161},[96],[27,163,165,168],{"style":164},"top:-3.23em;",[27,166],{"className":167,"style":152},[151],[27,169],{"className":170,"style":172},[171],"frac-line","border-bottom-width:0.04em;",[27,174,176,179],{"style":175},"top:-3.677em;",[27,177],{"className":178,"style":152},[151],[27,180,182],{"className":181},[96],[27,183,185],{"className":184},[96,97],[27,186,63],{"className":187},[96],[27,189,192],{"className":190},[191],"vlist-s","​",[27,194,196],{"className":195},[139],[27,197,200],{"className":198,"style":199},[143],"height:0.686em;",[27,201],{},[27,203],{"className":204},[205,127],"mclose",[27,207],{"className":208,"style":209},[104],"margin-right:0.2222em;",[27,211,69],{"className":212},[213],"mbin",[27,215],{"className":216,"style":209},[104],[27,218,220,224],{"className":219},[87],[27,221],{"className":222,"style":223},[91],"height:0.6444em;",[27,225,73],{"className":226},[96],[11,228,230],{"id":229},"example","Example",[16,232,233],{},"Paying $9,000 of tax on $75,000 of income is an effective rate of 12%.",{"title":235,"searchDepth":236,"depth":236,"links":237},"",2,[238,239,240],{"id":13,"depth":236,"text":14},{"id":24,"depth":236,"text":25},{"id":229,"depth":236,"text":230},"taxes","The share of your total income that you actually pay in tax.","md",[],{},true,"\u002Fterms\u002Feffective-tax-rate",[249,250,251],"marginal-tax-rate","tax-bracket","tax-credit",{"title":6,"description":242},"terms\u002Feffective-tax-rate",[255,256,257],"The effective rate is total tax divided by income.","It is usually well below the marginal rate.","Deductions and credits lower it.","GcZ7BnHzvsEY2t5JAngS7uLVAG2K9M4v2wriBD7VD3Q",[260,264,268],{"title":261,"description":262,"path":263},"Marginal Tax Rate","The tax rate paid on your next dollar of income.","\u002Fterms\u002Fmarginal-tax-rate",{"title":265,"description":266,"path":267},"Tax Bracket","A range of income taxed at a particular rate in a progressive tax system.","\u002Fterms\u002Ftax-bracket",{"title":269,"description":270,"path":271},"Tax Credit","An amount subtracted directly from the tax you owe.","\u002Fterms\u002Ftax-credit",1793374005033]