Annual Raise Calculator 2026: How Much More After Taxes?

A raise increases your gross income, but the additional dollars are taxed at your marginal rate (not your average rate). On $80,000 in the 22% federal bracket, a $5,000 raise produces roughly $3,200-3,500 in additional after-tax income, not $5,000. The exact figure depends on whether the raise pushes income into the next bracket and what your state tax rate is.

Bracket creep occurs when a raise pushes some of your income into a higher marginal tax bracket. In 2026, the 22% bracket ends at $103,350 for single filers. A raise from $100,000 to $108,000 pushes $4,650 into the 24% bracket, slightly reducing the effective benefit of that portion of the raise. Only the dollars above the bracket threshold are taxed at the higher rate, not your entire income.

If your 401k contribution is set as a percentage of salary, it will automatically increase with your raise. A 5% contribution on $80,000 is $4,000/year; on $85,000 it becomes $4,250/year. The 2026 IRS elective deferral limit is $23,500, so very high earners may hit the cap regardless of percentage. Pre-tax contributions reduce your federal taxable income, softening the marginal tax impact of the raise.

Base salary compounds. A $5,000 raise today increases your base for all future raises, promotions, and often your 401k match (if match is a percentage of salary). A one-time $5,000 bonus is taxed as supplemental income (22% flat federal withholding) and does not compound. For long-term wealth building, base salary wins. Bonuses are valuable for short-term cash goals.

RSUs vest over time (typically 4 years) and are taxed as ordinary income at the price on the vest date. Add the expected annual vest value to your total compensation, but note it is variable: share prices change, and vesting schedules often have cliffs. The raise calculator above focuses on W-2 wage income. For total comp analysis, use the job offer evaluator.