- The rate on your last dollar is not the rate on your salary — the ladder above shows both for Washington, D.C..
- Thresholds are set in Washington, D.C. independently of every other region, so a raise crosses a bracket at a different income here.
- The rate in the table above is the Washington, D.C. layer only — federal tax applies on top of it at every income.
- Social Security and Medicare withholding is not income tax, but it comes off the same paycheck — the take-home column includes it.
How tax brackets work in Washington, D.C.
Washington, D.C. taxes wage income on its own schedule, and the federal government taxes the same income on a separate one. Both apply at once, so the rate on your last dollar is the sum of the two — the marginal rate column in the ladder above.
The table at the top of this page is the Washington, D.C. layer alone. Its top rate is 10.75%. Each rate applies only to income inside its own band, so someone earning just above a threshold pays the higher rate on the excess and nothing more.
Before any of that, deductions reduce the income the rates are applied to. The federal standard deduction applies everywhere; Washington, D.C. sets its own rules, which the tables above reflect. The ladder below them is the figure worth reading, because it applies both layers to a real salary.
How these figures are calculated
The ladder above is computed by the same engine that powers the take-home calculators: the federal standard deduction, the federal bracket schedule, the Washington, D.C. schedule above it, then Social Security up to the annual wage base and Medicare on the full amount.
The marginal rate is measured rather than looked up — the engine computes tax on the salary, then on the salary plus a small increment, and reports the difference as a rate. That catches the phase-outs and recapture provisions a bracket table alone would miss.
What is not included: local and city income taxes, itemized deductions, health premiums, and retirement contributions. Those are household-specific and would make the figures less comparable between states, not more accurate.
A worked example
On $75,000 of wage income in Washington, D.C., income tax comes to $11,604, leaving $57,659 after tax and payroll withholding. That is an average rate of 15.5% against a marginal rate of 30.5%.
The distance between those two numbers is the point of this page. The marginal rate is what a raise or a bonus is taxed at; the average rate is what the salary as a whole costs. Quoting the marginal rate as “my tax rate” overstates the bill by a wide margin at almost every income.
Key terms
- Marginal rate
- The combined federal and state rate on your next dollar of income. What a raise or a bonus is actually taxed at.
- Average rate
- Total income tax divided by gross salary. Always well below the marginal rate once more than one bracket is in play.
- Standard deduction
- Income subtracted before rates apply. The federal amount applies everywhere; state rules differ and some states have none.
- Payroll tax
- Social Security and Medicare. Social Security stops at an annual wage base, so it weighs more on a modest salary.