How this calculation works
This calculator evaluates whether a higher salary offer truly pays by deducting marginal income taxes, vehicle operating and depreciation costs, transit fares, and the value of lost personal travel time.
Key formulas
- Marginal tax drag: Salary raises are taxed at your highest marginal income tax rate (Federal + State + FICA), which reduces a $15,000 headline raise to $10,500 in take-home cash at a 30% marginal bracket.
- Annual commute expenses: Calculated using the IRS standard business mileage rate ($0.67/mile) or your specified per-mile cost, plus annual parking fees, road tolls, and public transit passes.
- Net cash gain: After-tax salary raise minus the extra annual commute expenses.
- Committed time: Total paid work hours (typically 2,000 hours for a 40-hour work week) plus total annual commute hours spent driving or riding transit.
- Effective hourly wage: Total net take-home pay divided by total committed hours.
- Break-even salary: The gross salary required for after-tax earnings to cover your additional travel costs and monetized personal time.
Sources and benchmark dates
Vehicle reimbursement benchmarks reflect the Internal Revenue Service (IRS) standard mileage rate. Travel time valuations are informed by the US Department of Transportation Guidance on the Valuation of Travel Time. Marginal tax benchmarks reflect IRS and state revenue brackets. Checked on 2026-10-12.
A planning estimate based on your inputs and the assumptions shown. Actual tax liabilities depend on your full filing deductions and state residence.