You'll typically keep somewhere between about 60 and 80 cents of every dollar of a raise, depending on your federal tax bracket, your state and your deductions. The share taxes take from a raise is set by your marginal rate (the rate on your last dollars of income), which is higher than the average rate on your whole paycheck. That's why a $5,000 raise usually adds less than $5,000 to your take-home pay.
The good news: a raise never lowers your take-home pay. Below we explain how to estimate what you'll keep, with worked examples at different incomes. To check a specific raise, enter your old and new salary in the paycheck calculator.
How a raise is taxed
Your raise is stacked on top of the income you already earn, so it's taxed at the highest rates you currently pay. Four layers typically apply:
- Federal income tax at your marginal bracket rate: 10%, 12%, 22%, 24% or higher.
- Social Security at 6.2%, until your wages reach the $184,500 wage base for 2026.
- Medicare at 1.45% on all wages, plus 0.9% withheld on wages over $200,000.
- State and local income tax, at your state's marginal rate.
Add those up and you get your combined marginal rate. Subtract it from 100% and you have the share of your raise you'll keep. For example, a single filer in the 12% federal bracket living in a state with a 4.25% flat tax has a combined marginal rate of 12% + 7.65% + 4.25% = 23.9%, so they keep about 76 cents of each raise dollar.
The "higher bracket" myth
Some people worry that a raise could push them into a higher bracket and leave them worse off. That doesn't happen with federal income tax brackets. Only the dollars above each bracket threshold are taxed at the higher rate; the rest of your income is taxed exactly as before. Our guide to marginal vs effective tax rates explains this in more depth.
Worked examples: what your raise is worth in take-home pay
Example 1: a 10% raise in Michigan
A single filer in Michigan, paid biweekly, gets a raise from $55,000 to $60,500. No retirement or insurance deductions.
| Per biweekly paycheck | $55,000 | $60,500 | Change |
|---|---|---|---|
| Gross pay | $2,115.38 | $2,326.92 | +$211.54 |
| Federal income tax | $170.00 | $195.38 | +$25.38 |
| Social Security + Medicare | $161.82 | $178.01 | +$16.19 |
| Michigan income tax | $80.26 | $89.25 | +$8.99 |
| Take-home | $1,703.30 | $1,864.28 | +$160.98 |
Over a year, the $5,500 raise adds about $4,185 to take-home pay, or roughly 76% of the raise. Taxable income stays in the 12% federal bracket both before and after the raise, which is why this worker keeps a large share. All figures are estimates from our calculator.
Example 2: crossing into the 24% bracket in New York
A single filer in New York, paid semimonthly, goes from $118,000 to $126,000.
| Per semimonthly paycheck | $118,000 | $126,000 | Change |
|---|---|---|---|
| Gross pay | $4,916.67 | $5,250.00 | +$333.33 |
| Federal income tax | $713.75 | $790.58 | +$76.83 |
| Social Security + Medicare | $376.12 | $401.63 | +$25.51 |
| New York tax and SDI | $248.04 | $267.71 | +$19.67 |
| Take-home | $3,578.76 | $3,790.08 | +$211.32 |
The $8,000 raise adds about $5,072 a year, or roughly 63% of the raise. After the $16,100 standard deduction, taxable income rises from $101,900 to $109,900. The first $3,800 of the raise is taxed at 22% federally, and the last $4,200, above the $105,700 threshold, at 24%. Combined with New York's 5.9% bracket, more of each raise dollar goes to tax than in Example 1. Employees also pay a New York Paid Family Leave contribution not included here, and New York City residents would pay city income tax on top.
Example 3: a 5% raise for a married couple in Tennessee
A married couple filing jointly in Tennessee, with one earner paid biweekly, sees salary rise from $90,000 to $94,500. Their take-home goes from $2,949.04 to $3,088.11 per paycheck, an increase of $139.07. Over the year that's about $3,616 of the $4,500 raise, or roughly 80%. They're in the 12% federal bracket and Tennessee has no income tax on wages, so they keep more of each raise dollar than either of the earlier examples.
Quick reference: share of a raise you keep
| Situation | Raise | Added take-home per year | Share kept |
|---|---|---|---|
| Married, Tennessee, $90,000 to $94,500 | $4,500 | $3,616 | About 80% |
| Single, Michigan, $55,000 to $60,500 | $5,500 | $4,185 | About 76% |
| Single, New York, $118,000 to $126,000 | $8,000 | $5,072 | About 63% |
Your share depends on your own bracket and state. You can compare states quickly through our state calculator directory.
Splitting a raise between your paycheck and savings
A raise is an easy time to save more, because you can increase your 401(k) contribution and still see a bigger paycheck. Back to the Michigan worker in Example 1, who was contributing 5% to a traditional 401(k) before the raise:
| Per biweekly paycheck | $55,000 at 5% 401(k) | $60,500 at 7% 401(k) |
|---|---|---|
| 401(k) contribution | $105.77 | $162.88 |
| Total taxes | $394.89 | $436.18 |
| Take-home | $1,614.72 | $1,727.86 |
By raising the contribution from 5% to 7% at the same time as the raise, this worker saves an extra $57.11 per paycheck and still takes home $113.14 more. Because traditional 401(k) contributions lower taxable income, the extra savings cost less than their face value. See how a 401(k) affects take-home pay for more detail.
Other things that can change with a raise
- Percentage-based deductions grow. A 401(k) set as a percentage of pay rises automatically with your salary.
- Some benefits are tied to salary, such as life or disability insurance premiums, which may increase slightly.
- Income-based credits and deductions claimed on your tax return can phase down as income rises. These don't show up on your paycheck, so if you rely on them, the IRS Tax Withholding Estimator can show the effect on your refund.
- Retroactive raises may arrive as a lump sum. If it's paid separately, your employer may withhold federal tax at the flat 22% supplemental rate. Our guide on how bonuses are taxed explains supplemental withholding.
Frequently Asked Questions
Can a raise make me take home less money?
Not because of federal tax brackets, since only income above a threshold is taxed at the higher rate. A paycheck can shrink only if deductions you chose, like a larger 401(k) percentage, increase by more than the raise.
How do I calculate my raise after taxes?
Run your paycheck at your old and new salary and subtract the two net amounts. For a quick estimate, multiply the raise by 100% minus your combined marginal rate (federal bracket + 7.65% FICA + state rate).
Why did my raise seem smaller on my first new paycheck?
Your raise is divided across all your paychecks for the year, then taxes come out at your marginal rate. A $5,500 raise is only $211.54 gross per biweekly check before any taxes.
Is a raise better than a bonus?
A raise usually carries forward into future years, while a bonus is one-time. Both are taxed as wages; bonuses paid separately are often withheld at a flat 22% federally, but your final tax is figured on your total income for the year.
Sources
- IRS: Tax inflation adjustments for tax year 2026
- IRS Publication 15: Employer's Tax Guide
- SSA: Contribution and Benefit Base
- Tax Foundation: State Individual Income Tax Rates for 2026
Run the numbers for your state
Written and checked against IRS, Social Security Administration and state tax agency publications for the 2026 tax year. General information, not tax, legal or financial advice. Read our editorial policy, calculation methodology and sources.