After-Tax Yield Calculator
Yield kept after tax on investment income.
Convert a pre-tax bond or savings yield into the after-tax yield kept at your marginal income tax rate. Enter pre-tax yield and see the result instantly.
What this tool does
Two investments paying the same headline yield can leave very different amounts in your pocket once tax is taken. Enter the pre-tax yield, your marginal tax rate on the income, and the principal. The tool shows the after-tax yield, the cash income kept, and the tax paid.
Enter Values
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
A 5% pre-tax savings yield at a 40% marginal rate is a 3% after-tax yield. On 10,000 that means 300 kept versus 500 of headline income. Comparing taxable bonds, tax-free wrappers and dividend-paying assets requires comparing them on after-tax yield, not the headline number.
What the result means
After-tax yield is what you actually grow your wealth by. Use it to compare a taxable account against a sheltered wrapper at the same headline yield, or to compare two products at different headline yields and tax treatments.
The same math gives the equivalent taxable yield needed to match a tax-free product: divide the tax-free yield by (1 − tax rate).
Quick example
With pre-tax yield of 5% and marginal tax rate of 40% (plus investment amount of 10,000), the result is 3.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Pre-Tax Yield, Marginal Tax Rate, and Investment Amount. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
After-tax yield is the pre-tax yield multiplied by one minus the marginal rate. Cash income is principal times pre-tax yield; cash kept is principal times after-tax yield; tax paid is the difference. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
What the headline number hides
Gross pay, net pay, and what actually lands in your account can differ by thousands depending on tax code, benefits, pension contributions, and student loan deductions. This tool isolates one piece of that picture — always pair it with a take-home calculator for the full view.
What this doesn't capture
Tax bands, pension contributions, student-loan deductions, and benefits-in-kind sit outside this calculation. The figure is the headline; your actual position depends on local tax rules and personal circumstances. Pair with a dedicated take-home calculator for the full picture.
Your after-tax yield on this investment is the percentage shown above.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
After-tax yield is the pre-tax yield multiplied by one minus the marginal rate. Cash income is principal times pre-tax yield; cash kept is principal times after-tax yield; tax paid is the difference.
References
Frequently Asked Questions
Why care about after-tax yield?
What rate should I use?
Does this work for tax-free wrappers?
Inflation?
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