Income tax is a mandatory contribution levied by governments on individuals' earnings. Most countries use a progressive tax system, meaning higher income portions are taxed at higher rates. Understanding how income tax works helps you plan your finances, compare job offers across countries, and optimize your take-home pay.
How Tax Brackets Work
Tax brackets are income ranges taxed at specific rates. The key concept is that brackets are marginal — only the income within each bracket is taxed at that bracket's rate, not your entire income.
Income Range
Tax Rate
$0 – $11,600
10%
$11,601 – $47,150
12%
$47,151 – $100,525
22%
$100,526 – $191,950
24%
$191,951 – $243,725
32%
$243,726 – $609,350
35%
$609,351+
37%
Table: US Federal Tax Brackets (2025-2026, Single Filer)
Step-by-Step: How to Calculate Your Income Tax
1Select Your Country
Choose your country or region from the dropdown in our Income Tax Calculator. We support China, USA, UK, Australia, Canada, Japan, and Hong Kong.
2Enter Your Annual Salary
Input your gross annual income before any deductions. The calculator will automatically apply the standard deduction for your country.
3View Your Results
The calculator shows: gross salary, deduction amount, taxable income, total tax, effective rate, monthly tax, and most importantly — your take-home pay.
Tip: The effective tax rate is the actual percentage of your income that goes to tax. It's always lower than your marginal rate because of progressive brackets and deductions.
Country-by-Country Overview
🇨🇳 China (Individual Income Tax)
China uses 7 progressive brackets from 3% to 45%. The standard annual deduction is ¥60,000. Social insurance and housing fund contributions are deducted before tax calculation.
Standard deduction: ¥60,000/year
Brackets: 3%, 10%, 20%, 25%, 30%, 35%, 45%
Special: Year-end bonus can be taxed separately or combined
🇺🇸 United States (Federal Income Tax)
The US uses 7 federal brackets from 10% to 37%. The standard deduction for 2025 is $14,600 (single). FICA adds 7.65% (Social Security 6.2% + Medicare 1.45%).
Standard deduction: $14,600 (single), $29,200 (married)
Federal brackets: 10% to 37%
FICA: 7.65% employee + 7.65% employer
🇬🇧 United Kingdom (Income Tax)
UK has a personal allowance of £12,570, then three bands: 20% basic, 40% higher, 45% additional. National Insurance is separate.
Personal allowance: £12,570
Basic rate: 20% (£12,571–£50,270)
Higher rate: 40% (£50,271–£125,140)
Additional rate: 45% (£125,140+)
🇦🇺 Australia (Income Tax)
Australia has a tax-free threshold of A$18,200. Above that, rates go from 16% to 45%. Medicare Levy adds 2%.
Tax-free threshold: A$18,200
Brackets: 16%, 30%, 37%, 45%
Medicare Levy: 2%
🇨🇦 Canada (Federal + Provincial)
Canada combines federal (15%–33%) and provincial taxes. Federal brackets: 15%, 20.5%, 26%, 29%, 33%.
Federal basic personal amount: C$15,705
Federal brackets: 15% to 33%
Provincial rates vary by province
🇯🇵 Japan (National Income Tax)
Japan uses 7 progressive brackets from 5% to 45%. The basic deduction is ¥480,000. Residents also pay 10% local inhabitant tax.
Basic deduction: ¥480,000
Brackets: 5%, 10%, 20%, 23%, 33%, 40%, 45%
Local tax: 10% (flat)
🇭🇰 Hong Kong (Salaries Tax)
Hong Kong has one of the lowest tax rates globally. Progressive rates from 2% to 17%, or standard rate of 15% — whichever is lower. Personal allowance is HK$132,000.
Personal allowance: HK$132,000
Progressive: 2%, 6%, 10%, 14%, 17%
Standard rate option: 15%
MPF contribution: 5% (capped)
Tax Optimization Tips
Use deductions: Always claim the standard deduction or itemize if your deductions exceed the standard amount.
Retirement contributions: In the US, contribute to 401(k) or IRA. In China, use the housing fund. In UK, pension contributions get tax relief.
Year-end bonus optimization: In China, you can choose to tax your bonus separately or combined with salary. Use our Bonus Tax Optimizer to find the cheaper option.
Compare countries: If you're considering working abroad, use our Tax Compare tool to see take-home pay differences.
Understand effective vs marginal rate: Your marginal rate is the rate on your last dollar earned. Your effective rate is what you actually pay overall.
Frequently Asked Questions
What's the difference between gross and net income?
Gross income is your total earnings before deductions. Net income (take-home pay) is what you receive after taxes and other deductions are subtracted.
What is the standard deduction?
The standard deduction is a fixed amount that reduces your taxable income. It varies by country and filing status. If your deductions exceed the standard amount, you can itemize instead.
Are tax brackets the same in every country?
No. Each country sets its own brackets, rates, and deductions. Our calculator supports 7 countries with their specific tax rules.