What is the difference between a marginal tax rate and an effective tax rate?

The U.S. uses a progressive tax system with brackets, which means different portions of your income are taxed at different rates. Your marginal rate is the highest bracket rate you reach — but you only pay that rate on income within that bracket, not on everything you earned. Your effective rate is the total amount of tax you paid divided by your total income, and it is always lower than your marginal rate for most taxpayers. For example, a taxpayer in the 22% bracket might have an effective rate of only 13 to 15% after accounting for the lower rates on income in the lower brackets.