A $5,000 raise does not add $5,000 to your pocket. Part of it goes to federal income tax, Social Security and Medicare, and possibly state tax. The share you lose is your marginal rate: the tax on your last dollars of income.
Why you never lose money by earning more
There is a common fear that a raise can push you into a higher bracket and reduce your pay. That cannot happen. Only the part of your income above the bracket threshold is taxed at the higher rate, so more income always means more take-home pay. See the 2026 brackets for how this works.
What a raise is worth
Examples for a single filer in a state with no income tax:
| Current salary | Raise | Extra take-home per year | Extra per month | Share kept |
|---|---|---|---|---|
| $40,000 | $3,000 | $2,411 | $201 | 80% |
| $60,000 | $5,000 | $4,018 | $335 | 80% |
| $80,000 | $8,000 | $5,628 | $469 | 70% |
| $120,000 | $10,000 | $6,871 | $573 | 69% |
In a state with income tax, the share you keep is lower. Open your state page and check the "how much of a raise you keep" section for your own figure.
Smart ways to use a raise
- Increase your 401(k) contribution so part of the raise goes to retirement before tax.
- Ask whether the raise comes with benefit cost changes, such as higher insurance premiums.
- Compare offers using take-home pay, not gross. See comparing job offers.
Try the take-home pay calculator to see your own numbers, or pick your state from the state list.