Effective Tax Rate by Income 2026: Who Pays Federal Income Tax

Americans paid an average of 14.1% of their adjusted gross income (AGI) in federal income tax for tax year 2023, the latest year with complete IRS data, according to IRS Statistics of Income (SOI) Table 4.1, published in March 2026. The rate rises with income: 3.7% for the bottom half of filers, 15.6% for the top half, 20.9% for the top 10% and 26.3% for the top 1%, who reported AGI of at least $675,602. The top 1% paid 38.4% of all federal income tax on 20.6% of all AGI; the bottom 50% paid 3.3% on 12.3%. These are federal individual income tax rates only. They leave out Social Security and Medicare payroll taxes, self-employment tax, state and local taxes, and refundable credit payments.

Key takeaways:

• 14.1% of AGI was the average federal income tax rate for tax year 2023 across 153.1 million returns, excluding returns filed by dependents (IRS SOI Table 4.1)
• The top 1% (AGI of $675,602 or more) paid 38.4% of all income tax at a 26.3% average rate; the bottom 50% (AGI under $53,801) paid 3.3% at 3.7% (Tables 4.1 and 4.2)
• The IRS received $2.15 trillion of income tax on 160.6 million returns, $13,374 per return on average (our calculation); 49.0 million returns, 30.5%, owed none (Tables 1.1 and 3.3)
• Filers whose top bracket was 22% paid 10.9% of AGI in income tax after credits; filers in the 37% bracket paid 27.4% (Table 3.4)
• 21.9 million returns paid $81.1 billion of self-employment tax for tax year 2023, a tax the SOI average rates leave out (Table 3.3)
• Counting payroll, corporate and excise taxes, CBO puts the 2023 average federal tax rate at 20.4% for all households and 32.4% for the top 1%

What Is the Average Effective Tax Rate by Income Level?

Federal income tax took 6.5% of AGI for returns between $50,000 and $75,000 in tax year 2023, 10.7% for returns between $100,000 and $200,000, and 22.9% for returns between $500,000 and $1 million, by our calculation from IRS SOI Table 1.1. The effective rate here is total income tax divided by AGI for every return in the class, including returns that owed nothing. Returns with AGI from $1 to $25,000 paid 0.9% combined.

Source: IRS SOI, Publication 1304, Table 1.1, tax year 2023 (March 2026). The all-returns row includes 2,180,146 returns with no AGI, not shown separately. *Our calculation: total income tax divided by all returns, and by all AGI, in each class. The last column is the IRS-published rate for taxable returns only.

The rate rises through $10 million and then dips: 28.0% for returns between $2 million and $10 million, 25.7% above $10 million. The percentile data below show why: at the very top, more income is capital gains taxed at lower rates. The IRS's own column, which covers only taxable returns, runs higher at low incomes (3.9% under $5,000) because it leaves out the 98% of those filers who owed nothing.

How Much Income Tax Does the Average American Pay?

The average individual income tax return for tax year 2023 carried $13,374 of federal income tax, by our calculation: $2.148 trillion of total income tax divided by 160,602,107 returns in IRS SOI Table 1.1. Counting only the 111,572,368 returns that owed tax, the IRS-published average is $19,251. The other 49,029,740 returns, 30.5% of the total, had no federal income tax liability (Table 3.3).

Averages differ by a factor of hundreds across the distribution. The average top-1% return paid $537,909 for tax year 2023 and the average bottom-50% return paid $913, by our calculation from Tables 4.1 and 4.2, a ratio of about 589 to 1. A return in the $50,000 to $75,000 AGI class paid $4,009. Half of all returns excluding dependents reported AGI of $53,801 or more, the floor of the top 50%.

Who Pays Federal Income Taxes? Shares by Income Percentile

The top 1% of filers paid 38.4% of all federal income tax for tax year 2023 while reporting 20.6% of all AGI, according to IRS SOI Table 4.1, and the top 10% paid 70.5% on 47.6% of AGI. The bottom 50% paid 3.3% of income tax on 12.3% of AGI (Table 4.2). Average rates follow the same order: 26.3% for the top 1%, 20.9% for the top 10%, 15.6% for the top 50% and 3.7% for the bottom 50%.

Source: IRS SOI, Publication 1304, Tables 4.1 and 4.2, tax year 2023 (March 2026). Returns filed by dependents are excluded. Groups are cumulative: the top 10% includes the top 1%. *Our calculation: group total income tax divided by number of returns.

Between the cumulative groups, the rate steps down evenly. By our calculation from Table 4.1, filers between the top 1% and the top 5% paid 18.7% of AGI, the next 5% paid 14.2%, the 11th to 25th percentiles paid 10.6% and the 26th to 50th percentiles paid 7.7%. IRS audit rates by income, covered in our IRS audit rates 2026 analysis, use total positive income rather than AGI, so those brackets do not line up exactly with these.

Why the Top 0.001% Pays a Lower Rate Than the Top 0.1%

The 1,531 returns in the top 0.001%, with AGI of $78,617,933 or more, paid 23.6% of AGI in tax year 2023, less than the 26.7% paid by the top 0.1%. IRS SOI Table 4.3 shows the reason: capital gains taxed at preferential rates made up 54.9% of the top 0.001% group's AGI, against 25.9% for the top 1% and about 1% for the bottom 50% (our calculation). Table 3.4 lists those preferential rates as 0%, 15%, 20%, 25% and 28%, all below the 37% top rate on ordinary income.

How Have Income Tax Shares and Rates Changed Since 2014?

The top 1% share of federal income tax moved between 37.3% (tax year 2016) and 45.8% (tax year 2021) in the ten years through tax year 2023, according to IRS SOI Table 4.1. The 2021 peak came when the top 1% reported 26.3% of all AGI, the highest share in the table's 2001 to 2023 series; by 2023 their AGI share was back to 20.6% and their tax share to 38.4%. The bottom 50% share ranged from 2.3% to 3.3% and ended the period at its high.

Source: IRS SOI, Publication 1304, Tables 4.1 and 4.2 (2001 to 2023 series, March 2026). AGI floors in current dollars.

The average rate for all filers fell from 14.6% in tax year 2017 to 13.3% in tax year 2018, the first year of the rate tables still in force today, and stood at 14.1% in tax year 2023. Over the decade the AGI needed to join the top 1% rose 45%, from $465,626 to $675,602, and the floor of the top 50% rose 41%, from $38,173 to $53,801 (our calculation, current dollars). Total income tax grew 56.0%, from $1.374 trillion to $2.144 trillion.

Marginal vs Effective Tax Rate: What Is the Difference?

A marginal tax rate is the rate on the last dollar of taxable income; an effective tax rate is total tax divided by income. For tax year 2023, filers whose highest bracket was 22% paid 10.9% of AGI in income tax after credits, and filers who reached the 37% bracket paid 27.4%, according to IRS SOI Table 3.4.

Source: IRS SOI, Publication 1304, Table 3.4, tax year 2023, all returns classified by the highest rate at which tax was computed. Not shown: 2,600,622 returns whose highest rate was a capital gains rate or came from Form 8814 or Form 8615 (our count).

The 12% bracket was the most common top rate, reached by 54.6 million returns (34.0%). Another 30.7 million returns (19.1%) had no taxable income, and 4.6 million (2.9%) reached 32% or higher.

Two things keep the effective rate below the bracket. Deductions come first: the 2026 standard deduction is $16,100 for a single filer. Then the brackets are graduated, so only income above each threshold is taxed at the higher rate. A single filer with $75,000 of W-2 wages in 2026 has $58,900 of taxable income and owes $7,670: 10% on the first $12,400, 12% on the next $38,000 and 22% on the last $8,500. That is a 22% marginal rate and a 10.2% effective rate on wages (our calculation from the Rev. Proc. 2025-32 rate table). The seven rates from 10% to 37% are the same in 2023 and 2026: Rev. Proc. 2025-32 states that Public Law 119-21 made the rate tables in effect since 2018 permanent, while the thresholds rise with inflation each year. Our 2026 tax brackets guide lists every bracket, and the effective tax rate calculator runs the same math for your own income.

Effective Tax Rates for the Self-Employed: SE Tax Comes on Top

Self-employed filers owe self-employment tax in addition to income tax, and none of it is in the SOI average rates above. For tax year 2023, 21,853,594 returns reported $81.1 billion of self-employment tax, about $3,710 per return, according to IRS SOI Table 3.3, which counts it under "all other taxes" rather than total income tax. The average ran from $3,191 for returns with AGI between $50,000 and $75,000 to $7,728 for returns between $200,000 and $500,000 (our calculation).

Self-employment tax is 12.4% for Social Security plus 2.9% for Medicare, applied to 92.35% of net earnings, and half of it is deductible when figuring AGI (IRS Topic 554). The Social Security part stops at the wage base, $184,500 for 2026 (SSA). An employee pays 7.65% through withholding and the employer pays the other 7.65% (IRS Topic 751); a sole proprietor pays both halves. Many sole proprietors can also take the qualified business income (QBI) deduction of up to 20% of QBI, limited to 20% of taxable income before the deduction minus net capital gain (IRS).

Source: our calculation using Rev. Proc. 2025-32 (2026 rate table and standard deduction), IRS Topic 554 and Topic 751, and the Instructions for Form 8995 (QBI is reduced by the deductible part of SE tax). Assumes no other income, deductions or credits. The W-2 worker's employer also pays $5,738, not shown.

On the same $75,000, the self-employed filer pays $2,772 less income tax than the employee but $2,087 more in total, because SE tax is larger than the employee's FICA share. Their income tax rate is 6.5% of profit; their total federal rate is 20.7%. Run your own numbers in the self-employment tax calculator, read the self-employment tax guide for 2026, and see how much to set aside from 1099 income for quarterly estimates. The Form 8995 QBI guide covers the 20% deduction.

Not every business owner owes SE tax: it generally applies once net earnings from self-employment reach $400 (IRS Topic 554). That is one reason the 21.9 million SE tax returns fall short of the 31.1 million Schedule C returns counted in our self-employment statistics for 2026.

Total Federal Tax Rates by Income, Including Payroll Taxes

Counting payroll, corporate income and excise taxes along with income tax, the Congressional Budget Office estimates that households paid an average federal tax rate of 20.4% in 2023: 0.5% in the lowest quintile, 13.4% in the middle quintile, 26.0% in the highest quintile and 32.4% in the top 1%, according to supplemental Table 9 of CBO's "The Distribution of Household Income, 2023" (September 2026).

Source: Congressional Budget Office, "The Distribution of Household Income, 2023" (September 24, 2026), supplemental data Table 9. Calendar year 2023.

CBO's rates are not comparable with the IRS figures above. CBO ranks roughly 134 million households, not tax returns, by income before transfers and taxes adjusted for household size, and that income includes employer-paid payroll taxes and health insurance premiums. CBO's income tax figures also net out refundable credits such as the earned income tax credit, so a household whose credits exceed its tax has a negative rate: -11.1% for the lowest quintile in 2023. Payroll taxes were larger than income taxes for the bottom four quintiles; the middle quintile paid 8.9% in payroll taxes and 3.0% in income tax. The top 1% paid 26.1% of all federal taxes and 38.8% of individual income taxes (Table 12), and a single-person household needed $549,000 of income to rank in that group (Table 2).

What These Statistics Do NOT Mean

• AGI is not all income. SOI defines AGI as total income under the tax code less statutory adjustments. CBO divides by a broader income measure, and its 2023 income tax rate for the top 1% is 23.7%, against 26.3% in the IRS data.
• Returns are not people or households. A joint return covers two spouses. Tables 4.1 to 4.3 exclude 7.5 million returns filed by dependents, which is why they count 153.1 million returns against 160.6 million in Table 1.1.
• Total income tax leaves out refundable credit payments. SOI counts only the part of refundable credits that reduces tax. Net of refundable credits, the 66.0 million returns with AGI under $40,000, including returns with no AGI, had income tax of -$59.1 billion for tax year 2023 (our calculation from Table 3.3). Refundable portions paid out came to $93.0 billion on 26.2 million returns.
• An effective rate is not a marginal rate. A filer in the 22% bracket paid 10.9% of AGI on average. Applying a bracket rate to all income overstates the tax.
• These are tax year 2023 rules. Returns were filed in 2024. Public Law 119-21 raised the 2025 standard deduction to $15,750 for single filers (Rev. Proc. 2025-32, sections 2.08 and 3.01), and bracket thresholds move with inflation every year, so later years will differ.
• Federal only. State and local income, sales and property taxes are not in any figure on this page.
• Percentile cutoffs move every year. Ranking in the top 1% took $675,602 of AGI in tax year 2023 and $465,626 in tax year 2014.
• SOI figures are sample estimates. Every IRS table cited here is marked "All figures are estimates based on samples."

Effective Tax Rate by Income: Five Facts to Cite

1. According to IRS Statistics of Income Table 4.1, filers paid an average of 14.1% of adjusted gross income in federal income tax for tax year 2023.
2. According to IRS SOI Table 4.1, the top 1% of filers, with AGI of $675,602 or more, paid 38.4% of all federal income tax for tax year 2023 at an average rate of 26.3%.
3. According to IRS SOI Table 4.2, the bottom 50% of filers paid 3.3% of all federal income tax for tax year 2023 at an average rate of 3.7%.
4. According to IRS SOI Table 1.1, Americans paid $2.15 trillion in federal income tax on 160.6 million returns for tax year 2023, an average of $13,374 per return by Jupid's calculation.
5. According to IRS SOI Table 3.3, 21.9 million returns reported $81.1 billion of self-employment tax for tax year 2023, a tax not included in IRS average income tax rates.

Methodology and How to Cite This Page

We downloaded IRS SOI tables for tax year 2023 from irs.gov on November 11, 2026: Tables 4.1, 4.2 and 4.3 (percentiles), Table 3.4 (marginal rates), and Tables 1.1 and 3.3 (size of AGI), each marked "Publication 1304, March 2026." Tax year 2023, returns filed in 2024, is the latest complete year; the SOI percentile tables list no tax year 2024 data as of that date. "Total income tax" follows the SOI definition: income tax after credits, limited to zero, plus net investment income tax, excluding the refundable portions of credits; the IRS average rate divides it by AGI. CBO figures come from the supplemental data file for "The Distribution of Household Income, 2023," released September 24, 2026. Averages per return, rates for all returns by AGI class, non-cumulative percentile bands, capital gains shares, growth rates, the refundable-credit total under $40,000 and the 2026 examples are our calculations. IRS amounts are published in thousands of dollars (Tables 1.1, 3.3, 3.4, 4.3) or millions (Tables 4.1, 4.2).

How to cite: Jupid, "Effective Tax Rate by Income 2026: Who Pays Federal Income Tax," November 2026, https://jupid.com/blog/effective-tax-rate-by-income-2026 (data: IRS Statistics of Income, Publication 1304, tax year 2023).

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Sources

• IRS SOI: Individual Statistical Tables by Tax Rate and Income Percentile (Table 4.1 XLSX, Table 4.2, Table 4.3, Table 3.4)
• IRS SOI: Individual Statistical Tables by Size of Adjusted Gross Income (Table 1.1, Table 3.3)
• IRS SOI: Individual Income Tax Returns Complete Report (Publication 1304)
• Congressional Budget Office: The Distribution of Household Income, 2023 (report and supplemental data)
• IRS: Rev. Proc. 2025-32 (2026 rate tables, standard deduction, QBI thresholds)
• IRS Topic 554, Self-Employment Tax and Topic 751, Social Security and Medicare Withholding Rates
• IRS: Qualified Business Income Deduction and Instructions for Form 8995
• Social Security Administration: Contribution and Benefit Base

This page is for general educational purposes and does not constitute tax, legal, or accounting advice. IRS figures are sample-based estimates for all returns filed for tax year 2023 and describe groups of filers, not any individual return. For advice on your own situation, consult a qualified tax professional.