Pay Raise Tax Impact Calculator 2026 — How Much Will You Keep?

A raise puts your additional income in a higher tax bracket at the margin. Every extra dollar above a bracket threshold is taxed at the higher rate. Additionally, FICA (Social Security + Medicare) applies to all wages up to the Social Security wage base ($184,500 in 2026). So a $10,000 raise might only net you $5,500–$6,500 depending on your situation.

Your marginal rate is the tax rate applied to your last dollar of income — the rate of the highest bracket you reach. A raise is taxed at your marginal rate, not your average (effective) rate. If a portion of your raise crosses into a higher bracket, that portion is taxed at the higher rate while the lower portion stays at the lower rate.

No — a common misconception. "Bracket creep" does not reduce your total take-home pay. Only the income above the bracket threshold is taxed at the higher rate. You always keep more money after a raise. The concern is only that you keep a smaller percentage of the raise amount that crosses the bracket line.

Bonuses are "supplemental wages" subject to flat 22% federal withholding (or 37% for bonuses over $1M in the same calendar year). This is just the withholding rate — your actual tax liability is calculated at year-end using your marginal rate. A raise is taxed at your true marginal rate; a bonus is withheld at 22% flat but reconciled at your marginal rate on your tax return.

Yes. If you increase your 401(k) or HSA contributions alongside your raise, those pre-tax contributions reduce your taxable income. This is often the best way to "capture" a raise efficiently: direct part of the raise into pre-tax accounts, reducing the net tax hit and building retirement savings simultaneously.