Marginal Tax Rate
The rate of tax that applies to the next dollar you earn — not your overall tax rate.
Also called: marginal rate
Income tax is progressive in most countries: each slice of income is taxed at a different rate. Your marginal rate is the rate on the highest slice you've reached.
A common misconception: 'getting bumped into a higher bracket' makes you take home less. That's wrong — only the income above the bracket threshold is taxed at the higher rate.
Marginal rate is the right number to use when deciding whether an extra hour of work, a bonus, or a 401(k) deferral is worth it. Effective rate (your average rate) is the right number for budgeting.