Definition:

The income tax rate is a percentage of a taxpayer’s taxable income that is paid to the government as income tax. It is a progressive tax rate, meaning that the rate increases with the amount of income earned.

Calculation:

The income tax rate is calculated based on a taxpayer’s taxable income and the applicable tax brackets. Tax brackets divide the income range into different intervals, and each interval has a different tax rate. To calculate the income tax rate, you need to find the tax bracket that applies to your income and then multiply the taxable income by the corresponding rate.

Examples:

• 2023 Income Tax Rates in the United States:

  • 10% for taxable income up to $10,000
  • 12% for taxable income between $10,000 and $50,000
  • 22% for taxable income between $50,000 and $100,000
  • 24% for taxable income between $100,000 and $500,000
  • 32% for taxable income between $500,000 and $1 million
  • 35% for taxable income over $1 million

• 2023 Income Tax Rate in Canada:

  • 15% for taxable income up to $50,000
  • 20% for taxable income between $50,000 and $100,000
  • 26% for taxable income between $100,000 and $200,000
  • 33% for taxable income between $200,000 and $500,000
  • 35% for taxable income over $500,000

Factors Affecting Income Tax Rate:

• Location of residence
• Filing status (single, married, etc.)
• Age
• Deductions and credits
• Charitable contributions

Note: Income tax rates may vary slightly between countries and jurisdictions.