Marginal tax rate (TMI): definition and calculation

The marginal tax rate (TMI) corresponds to the highest rate at which a taxpayer is imposed for its income tax. Connected with the tax scale, it indicates the share of tax in its income. It is judicious to know this rate in particular to define whether a possible new income would be likely to have significant consequences on the taxpayer’s taxation. Discover the 2025 income tax scale.

Capital video: marginal tax rate

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What is the marginal tax rate?

TMI: definition

The marginal tax rate (TMI) of a taxpayer corresponds to the rate at which the last tranche of his income is imposed. The taxpayer’s income tax is calculated according to a progressive scale, made up of several tax tranches.

Marginal tax tranche

All slices of the scale are made up of a low limit and a high limit and are applied a progressive tax rate. If the income of a taxpayer is between the upper limit and the low limit of a tranche, the difference between its taxable income and the low limit is taxed at the rate of this tranche. This rate thus corresponds to the taxpayer’s marginal tax rate.

Attention : Do not confuse marginal tax rate and average tax rate. The average tax rate designates the percentage represented by tax compared to the taxable income of the person.

What’s the point of knowing your TMI?

Knowing your marginal tax rate is useful for managing your rental real estate or to optimize your investments. Indeed, it makes it possible to assess the consequences that additional income would provide. The latter will necessarily be taxed at the marginal rate or will even be able to switch the taxpayer in a higher tranche. It is therefore essential to take it into account.

What are the 5 tax slices?

2025 income tax scale

The 2025 tax scale (applicable to 2024 income) is set by the finance law for 2025. every year Depending on the level of inflation of last year. In 2025, the scale slices were revalued up to 1.8%.

Marginal tax tranche according to taxable income

Example of calculating the amount of the tax as a function of the marginal tax rate for a single person

A single person declares 38,888 euros in taxable income (35,000 euros after tax reduction for professional expenses of 10%). To calculate the amount of its income tax, the progressive scale of the tax is applied as follows:

• Up to 11,497 euros = 0 euro.
• From 11,497 to 29,315 euros: (29 315 – 11,497) x 11 % = 1,959.98 euros.
• From 35,000 (amount of his taxable income) to 29,315 euros (low limit of the tranche) or: (35,000 – 29,315) x 30 % = 1,705.50 euros.
• Or a total tax of 1,959.98 + 1,705.50 = 3,665.48 euros.

The marginal tax rate (TMI) of this single taxpayer is 30%, because its family quotient situates it in this tranche. Its income tax will amount to approximately 3,665 eurosbefore possible tax credit.

How to calculate the marginal tax rate for couples with or without children?

Take into account the family quotient of the home

The calculation of the marginal tax rate for single people is simple since it is a question of determining the rate at which the last tranche of its income is imposed. On the other hand, in the presence of couples married to or without children, it is necessary to take into account the family quotient of the tax household. It is necessary to take into account the family quotient of the household, which corresponds to the sum of the income of the tax household, divided by the number of tax shares:

• For single, divorced or widowed people, the number of family quotient shares is on the one hand.
• Married or PACS people are entitled to two shares of family quotient.
• People who have dependent children benefit from additional family quotient shares.

Maple of the family quotient

To find out the marginal tax rate, the taxable taxable income of the tax household should be divided by the number of family quotient shares, taking into account the flat -rate reduction of 10% for professional expenses.

Example of TMI for a couple married to a child

A married couple with a child has 2.5 parts of the family quotient. The tax household received 111,111 euros in taxable income (or 100,000 euros after reduction for professional expenses). The amount of taxable income (100,000 euros) should therefore be divided by the number of shares (2.5) or 100,000 / 2.5 = 40,000 euros.

Depending on the progressive scale of income tax, the marginal tax rate therefore corresponds to the 3ᵉ tax tranche or 30 % (group included from 29,315 euros to 83,823 euros).

The calculation of the tax as a function of the TMI for this couple is as follows:

• Up to 11,497 euros = 0 euro.
• From 11,497 to 29,315 euros: (29,315 – 11,497) x 11 % = 1,959.98 euros.
• From 40,000 (amount of taxable income) to 29,315 euros (low limit of the tranche) or: (40,000 – 29,315) x 30 % = 3,205.50 euros.
• Or a total tax of 1,959.98 + 3,205.50 = 5,165.48 euros.
• An amount which should then be multiplied by 2.5, a figure which corresponds to the number of family quotient shares of this household, or 5,165.48 x 2.5 = 12,913.70 euros in income tax to pay the tax administration.