What is a raise worth after tax, and how many years sooner does it get me to FI?
See what a raise adds to your pay after federal, payroll and state tax, what saving it does over a career, and how much sooner it gets you to financial independence.
Filing status
YOUR RAISE, AFTER TAX
$3,964/yr
At these inputs, a 4.0% raise ($5,800 a year) adds $3,964 to your pay after tax: federal income tax takes $1,392 at the 24% bracket, payroll tax $444, so you keep 68% of it. Saving 50% of it, $1,982 a year, gets you to financial independence 3 months sooner.
Raise before tax
$5,800
Tax on the raise
$1,836
You keep
68%
Sooner to FI
3 mo
UNDERSTAND YOUR RESULT
Where a raise goes
Of a $5,800 raise, $1,392 goes to federal income tax, $444 to Social Security and Medicare, leaving $3,964.
What the raise adds over your career, in today’s dollars
Added upSaved and invested
Over 31 years the raise puts $122,893 of extra pay in your pocket in today’s dollars; the $1,982 a year you save grows to $117,283 at 3.9% a year after inflation.
How much of a 4.0% raise you keep at different pay levels
$40k
80%
$60k
80%
$90k
70%
$145k
68%
$200k
74%
$300k
63%
$500k
63%
A 4.0% raise keeps 80% of its dollars at $40,000 of pay and 63% at $500,000, because higher pay reaches higher brackets; yours is highlighted.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Tax on the raise = tax on (pay + raise) − tax on pay: federal income tax, Social Security, Medicare and any state tax
After-tax raise = raise − tax on the raise
Saved each year = after-tax raise × the share you save
Years to FI = years for your invested balance, growing at the real return with your saving added, to reach spending ÷ 4%
- Federal income tax uses the 2026 brackets and standard deduction for single filers on your pay alone. Deductions beyond the standard deduction, such as a 401(k) or itemized deductions, are not included; a pre-tax deferral would lower the tax on the raise a little.
- Social Security tax stops at $184,500 of wages in 2026; Medicare tax has no cap, and an extra 0.9% applies to wages above $200,000 ($250,000 for a joint return). State tax is left out unless you enter a rate, which is applied to the whole raise.
- The raise is permanent and keeps its buying power (it is in today’s dollars). Years to financial independence use the FIRE calculator’s assumptions: 7% a year before inflation, 3% inflation, a 4% withdrawal rate, and your spending unchanged.
- The part of the raise you do not save is assumed to be spent, and it does not change the spending used for the FI number. If it raises your spending, your FI number rises too.
WORKED EXAMPLE · SAMPLE NUMBERS
4.0% × $145,000 = $5,800. Extra federal income tax $1,392 + payroll tax $444 = $1,836. After tax: $5,800 − $1,836 = $3,964 (68.3%). Saving 50% of it is $1,982 a year, $165 a month on top of the $4,300 you save now.
SOURCES
[1]Rev. Proc. 2025-32: 2026 inflation-adjusted tax items (brackets, standard deduction)Internal Revenue Service, 2025[2]Topic no. 751, Social Security and Medicare withholding ratesInternal Revenue Service[3]Topic no. 560, Additional Medicare TaxInternal Revenue ServiceHSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
Keep this number honest as your life changes.
Put it on your Money Map and it re-runs as you change the seven numbers. It stays in this browser, and the calculator stays free.
Questions about this result
It depends on the bracket the raise lands in. On $145,000 of pay in 2026, a $7,250 raise is taxed at 24% federal plus 7.65% Social Security and Medicare, so you keep about 68 cents of each dollar. Enter your own pay and raise to see yours.
No. Only the dollars above a bracket’s limit are taxed at the higher rate, so a raise never leaves you with less pay than before. This page shows the tax on the raise itself, which is the difference between the tax with it and without it.
Because tax is withheld from the raise like the rest of your pay: federal income tax, Social Security and Medicare, and state tax where you live. Your employer’s withholding also spreads over the year, so the first paychecks can look different from what you owe.
It depends on how much of it you save. This page adds the saved part of the after-tax raise to what you save each month and finds when your invested balance reaches 25 times your yearly spending, using the real-return assumptions of the FIRE calculator. Spending the raise leaves the date unchanged.
The tax works the same either way, on the dollars. Compare offers by the after-tax dollars they add, and by whether they change what you spend. Enter each as a percentage of your pay to compare.
State tax only if you enter a rate. A 401(k) contribution is not included: it would lower the tax on the raise a little, and it is saving you may already be doing, counted in the “saved each month” figure.
THE LEDGER · 25 minBuilding Passive Income to 20% of Your Total: The Proven System