What Is the Average Effective Tax Rate by Income?

The average effective federal income tax rate by income runs from about 3.7% for the bottom half of filers to roughly 26.1% for the top 1%, according to IRS data for tax year 2022.¹ The staircase in between is steady: the more you earn, the larger the share of each additional dollar that goes to federal income tax. Your own rate depends on where your income lands, what type of income it is, and which credits and deductions apply to you.

Average Effective Rates by Income Group

The figures below cover federal income tax only. They do not include payroll taxes, state taxes, or other federal levies, which are addressed further down.

Bottom 50% of filers (AGI below $50,339): 3.7% average effective rate, average tax of $822.¹
Top 25% to 10% (AGI roughly $96,044 to $178,611): about 9% to 12%.
Top 10% to 5% (AGI $178,611 to $261,591): 14.3%.¹
Top 1% (AGI above $663,164): 26.1%, average tax of about $561,500.¹

Those shares translate into a lopsided split of the total federal income tax bill. The top 1% earned 22.4% of all adjusted gross income and paid 40.4% of all federal income taxes collected. The bottom 50% earned 11.5% of total AGI and paid 3.0% of total income taxes.¹

Rates fell during 2020 and 2021 because of pandemic-era relief and expanded credits, then edged back up in 2022. The bottom half’s rate rose from 3.3% in 2021 to 3.7% in 2022. The top 1% went from 25.9% to 26.1%.¹ If you compare these numbers against older averages, that pandemic dip is likely the reason the gap moved.

Why the Effective Rate Is Lower Than the Bracket Rate

The U.S. federal income tax is progressive. Income is taxed in layers, and only the dollars that fall inside a given bracket are taxed at that bracket’s rate.² Someone “in the 24% bracket” pays 24% only on income above that bracket’s floor; everything below is taxed at 10%, 12%, and 22% along the way.

That layering alone drags the effective rate well below the top bracket a filer reaches. Two other mechanics push it down further.

Deductions Shrink the Income Being Taxed

A deduction reduces the income that gets taxed, not the tax itself. The 2026 standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.³ A single person earning $50,000 in wages has about $33,900 in taxable income before any further adjustments. Everything above the standard deduction is still subject to the brackets, but the brackets never see that first chunk.

Credits Cut the Tax Directly

Credits reduce tax dollar-for-dollar.⁴ Some are refundable, meaning they can drop your liability below zero and generate a refund. The Earned Income Tax Credit is fully refundable and worth up to $8,231 in 2026 for a family with three or more children, or up to $664 for a childless single filer.³ The Child Tax Credit, raised to $2,200 per qualifying child under the One, Big, Beautiful Bill Act, is partially refundable through the Additional Child Tax Credit, which can refund 15% of earned income above $2,500.⁵

Those credits are the main reason the bottom half of filers averages a 3.7% effective rate. For many households, credits fully erase the income tax the brackets would otherwise impose and leave a refund behind.

Investment Income Gets Its Own Rates

Long-term capital gains and qualified dividends are taxed under a separate rate structure capped at 20%, well below the 37% top ordinary rate.⁶ For 2026, a single filer pays 0% on long-term gains up to $49,450 of taxable income, 15% from there to $545,500, and 20% above that.⁷ A filer whose income is heavily investment-based can post a lower effective rate than a wage earner at the same AGI. This is a major reason some very high earners come in below where their raw income would place them.

What the Headline Rates Leave Out

The effective rates above cover federal income tax only. Most workers owe more than that to the federal government.

Payroll Taxes

Employees pay 6.2% of wages toward Social Security on earnings up to $184,500 in 2026, plus 1.45% toward Medicare on all wages with no cap.⁸ Employers pay a matching share, which most economists treat as part of the worker’s total compensation cost, bringing the combined payroll rate to 15.3% up to the Social Security wage base.⁹

Because the Social Security portion stops at $184,500, payroll taxes land harder on middle incomes in proportional terms. A household earning $70,000 might show an effective income tax rate under 8%, but the employee-side payroll tax of 7.65% pushes the total federal share closer to 15% or 16%. Self-employed workers owe both halves themselves, a combined 15.3%, with half deductible when calculating AGI.¹⁰

Surtaxes on Higher Earners

Two targeted taxes raise the effective rate at the top. A 3.8% Net Investment Income Tax applies to the lesser of your net investment income or the amount by which modified AGI exceeds $200,000 for single filers or $250,000 for joint filers.¹¹ It stacks on the capital gains rate, so a top-bracket long-term gain can face a combined 23.8%.¹² An Additional Medicare Tax of 0.9% hits wages and self-employment income above the same $200,000 and $250,000 thresholds.¹³

State income taxes are a separate layer on top of all of this, and they vary widely. Nine states impose none; others reach nearly 13% at the top. The averages here say nothing about that part of your bill.

How to Calculate Your Own Effective Rate

Pull your most recent Form 1040. Divide line 24 (total tax) by line 15 (taxable income) for your effective rate on taxable income. Divide line 24 by line 9 (total income) for the version used in most published averages, including the figures at the top of this article. The second number is almost always the lower of the two, because it credits you for the deductions that kept part of your income out of the tax base in the first place.

For a complete federal picture, add the Social Security and Medicare taxes from your W-2 (or self-employment tax from Schedule SE) to the income tax on line 24, then divide by total income. That combined figure usually runs several points higher than the income-tax-only rate, and it is the one to compare against your full paycheck when you want to know what the federal government actually takes.

1
Tax Foundation. Summary of the Latest Federal Income Tax Data, 2025 Update
2
Internal Revenue Service. Federal Income Tax Rates and Brackets
3
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
4
Internal Revenue Service. Tax Credits for Individuals: What They Mean and How They Can Help Refunds
5
Internal Revenue Service. Refundable Tax Credits
6
Internal Revenue Service. Topic No. 409, Capital Gains and Losses
7
Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates
8
Social Security Administration. Contribution and Benefit Base
9
Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
10
Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
11
Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax
12
Internal Revenue Service. Topic No. 559, Net Investment Income Tax
13
Internal Revenue Service. Topic No. 560, Additional Medicare Tax