Effective Tax Rate

on . Posted in Project Management Engineering

Effective tax rate, abbreviated as ETR, is the tax you actually pay versus the income you earn.

 

Corporation effective tax rate Formula

\(\large{ ETR = \frac{ T }{ EBT } }\)
Symbol
\(\large{ ETR }\) = effective tax rate
\(\large{ EBT }\) = earnings before taxes
\(\large{ T }\) = total tax

 

Individual effective tax rate Formula

\(\large{ ETR =  \frac{ T }{ TI } }\)
Symbol
\(\large{ ETR }\) = effective tax rate
\(\large{ TI }\) = taxable income
\(\large{ T }\) = total tax

 

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