After-Tax APY Calculator \

From Gross APY to After-Tax APY

The conversion is straightforward: after-tax APY equals the gross APY multiplied by (1 − your combined marginal tax rate). At an illustrative gross APY of 5.00% and a combined federal-plus-state marginal rate of 30%, your after-tax APY is roughly 3.50%. That single number tells you the real annual return on your deposited cash.

Understanding this gap matters when comparing savings vehicles. A tax-advantaged account like a Roth IRA shelters growth entirely, while a taxable savings account or CD does not. Two savers with the same gross APY can keep very different net yields depending on their income level and state of residence. The calculator applies your specific brackets rather than an assumed average, because that specificity is what makes the result useful for actual decisions. On a $40,000 balance, the difference between a 5.00% and a 3.50% effective yield is $600 per year — money that stays in the tax collector's hands rather than yours unless you choose a more tax-efficient vehicle.

When After-Tax Yield Changes Your Decision

An after-tax comparison can flip the ranking of two options. A CD offering a gross 5.00% APY in a state with 7% income tax may keep less than a Treasury bill at 4.80% that is exempt from state tax, since T-bills are taxed only at the federal level (per TreasuryDirect). Seeing both after-tax yields side by side eliminates guesswork.

The calculator is also useful for measuring whether a rate increase actually improves your net return. A raise at work can push you into a higher bracket, partially offsetting a better savings rate. Enter your updated numbers whenever your income or rate changes to stay current. Running the calculator after each annual raise or rate adjustment takes only a few seconds and can prevent you from holding an account that looks competitive on a gross basis but underperforms after taxes. For a direct CD-focused version of this analysis, the CD after-tax calculator factors in the term and penalty as well.

Tax brackets change with legislation and inflation adjustments. Use your current marginal rates for the most useful estimate.