Marginal and effective rates: how much IRPF you really pay
The difference between the marginal and the effective IRPF rate, why you should not fear moving up a bracket, and how much of each extra euro you keep.
When someone says "I'm in the 37% bracket", it almost never means they pay 37% of their salary. There are two different rates.
Marginal rate
The rate on the last euro you earn: the state and regional rates of the bracket your base falls into. It tells you how much of a pay rise or a deductible expense goes in tax.
Effective rate
The total paid divided by your salary. As the first euros pay little or nothing, it is always far below the marginal rate.
On €45,000 gross in Cataluña you pay 28.03% of your gross between Social Security and IRPF. That is your overall effective rate.
How much of an extra euro you keep
Going from €45,000 to €46,000 gross in Cataluña raises your net by €584: you keep 58.44% of that extra €1,000. More examples in how much of a pay rise reaches your pocket.
What each one is for
The marginal rate, for decisions: a rise, overtime, a deductible expense or a pension contribution.
The effective rate, for comparisons: between regions, between years or between autónomo and employee.
In the calculator, the IRPF-by-bracket table shows your marginal rate, and the share of total paid is your effective rate.