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Effective Marginal Rate & Benefit Cliffs illustration

Effective Marginal Rate & Benefit Cliffs

Your true marginal rate is not just the tax bracket: means-tested benefits that phase out as income rises act as a hidden extra tax, and hard cut-offs can make an extra unit of income cost you more than it pays — a benefit cliff. This country-agnostic calculator takes any bracket schedule and any set of benefit phase-outs, sweeps the whole income range, and charts net income and the effective marginal rate at every level. It flags every region where the effective rate reaches 100% or more, so you can see exactly where a raise would leave you poorer and which benefit causes it.

Read the full guide to this tool

Two columns per line: the income where the bracket starts and its rate in %. Ascending, first threshold 0. Commas are optional.
Four columns: a one-word name, the full yearly amount, and the incomes where the phase-out starts and ends (it falls linearly to 0 between them). Set end = start for a hard cliff. Leave empty for taxes only.
Marks your position on the charts and reports your personal rates.

Notes

  • The effective marginal rate is 1 minus how much of the next unit of gross income actually reaches your pocket, counting lost benefits as well as tax.
  • A cliff (rate ≥ 100%) means earning more leaves you with less — common where a benefit vanishes entirely at a threshold instead of tapering.
  • Stacked phase-outs are sneaky: several benefits each tapering gently can add up to a punishing combined rate over the same income range.
  • Amounts are yearly and currency-agnostic — enter the brackets and benefits of any country or year.
  • This is an educational estimate, not financial advice; talk to a qualified adviser before making money decisions.

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