Example 1 — Income below the threshold
- Income: 80,000
- Rates: 12% / 120,000 / 32%
Tax 9,600
Net 70,400
All income sits in band 1: 80,000 × 12% = 9,600. The effective rate is also 12%.
Income tax — simplified two-bracket model
Enter your annual income and we'll run it through two rates and a threshold. Want it closer to reality? Subtract a tax-free allowance first.
This is a simplification: two rates, one threshold, and an optional allowance subtracted from income before tax. It's not a tax return — it skips social contributions, credits, and any single country's actual filing rules. The 12% / 120,000 / 32% defaults are just illustrative brackets, so edit them freely for any country or year. You'll get tax, net income, and effective rate.
Result
Enter data and click Calculate.
How results are calculated
We work out the taxable base first, then apply the right bracket:
Taxable = max(0, income − allowance).
If taxable ≤ threshold: tax = taxable × rate1/100. Otherwise: tax = threshold × rate1/100 + (taxable − threshold) × rate2/100.
Net income = income − tax. Effective rate = tax ÷ income × 100.
How to use the calculator
- Enter the annual income you want to tax in this model.
- Set rate 1, threshold, and rate 2 (defaults 12 / 120,000 / 32).
- Optionally add a tax-free allowance in Advanced.
- Calculate to see tax, net income, and effective rate %.
- The diagram shows how much income sits in each bracket.
Usage examples
Example 2 — Crossing into band 2
- Income: 150,000
- Rates: 12% / 120,000 / 32%
Tax 24,000
Net 126,000
120,000 × 12% + 30,000 × 32% = 14,400 + 9,600. The higher rate applies only to the excess.
Example 3 — With a 30,000 allowance
- Income: 80,000
- Allowance: 30,000
- Rates: 12% / 120,000 / 32%
Tax 6,000
Net 74,000
Taxable base drops to 50,000 → 50,000 × 12% = 6,000. Net income is income − tax, not taxable − tax.
FAQ
Is this an official tax return calculator?
No — it's a simplified two-bracket model with an optional allowance. It skips credits, social contributions, filing status, and jurisdiction-specific rules.
Why are the defaults 12% / 120,000 / 32%?
They are illustrative example brackets used as a convenient starting point. Change them to match any country or year you are modelling — local tax rules may differ.
How does the tax-free allowance work here?
It is subtracted from income before tax: taxable = max(0, income − allowance). Real systems may apply allowances differently through credits or withholding.
Why is the effective rate lower than the top bracket?
Because only income above the threshold is taxed at the higher rate, and an allowance reduces the taxable base. Effective rate = tax ÷ income × 100.
Is “income” the same as gross salary?
Enter the annual amount you want to tax in this model. Payroll deductions and social contributions are separate — add them elsewhere if you need a closer paycheque estimate.
What happens above the threshold?
Band 1 applies up to the threshold; band 2 applies to the excess. Example: 150,000 with a 120,000 threshold at 12%/32% → tax = 120,000×12% + 30,000×32%.
Can I file taxes with this result?
No. Use your tax authority's tools or a professional for that. This page is only for order-of-magnitude planning, not your actual bill.
What else is useful alongside this?
VAT for invoice amounts, net ↔ gross for take-home pay, and the emergency fund for how many months your after-tax cash buffer covers.