From $100k to $120k: How Much More You Actually Keep

A $20,000 raise from $100,000 to $120,000 does not put $20,000 in your pocket. In a no-income-tax state, it adds $14,052 to annual take-home — roughly 70 cents on the dollar. In California, the same raise nets $12,192, or about 61 cents on the dollar. The headline number and the deposited number differ by between $5,948 and $7,808 depending entirely on where you live and how the increase splits across federal brackets.

That gap is the entire point of this analysis. Most coverage of a raise stops at the gross figure or recites a single marginal rate. The reality at the $100k-to-$120k transition is messier: the raise straddles two federal brackets, carries full FICA because both endpoints sit below the Social Security wage base, and then meets a state rate that swings the net by nearly $1,900 between New York and California alone.

What you actually keep: the summary numbers

The keep-rate on this specific raise depends on three layers stacked in sequence: federal income tax across the 22% and 24% brackets, FICA at 7.65%, and state income tax. Here is the full picture for a single filer.

Source: Author calculations using IRS 2025 single-filer brackets (Revenue Procedure 2024-40), 2025 Social Security wage base of $176,100 (Social Security Administration, October 2024), and 2025 state marginal rates. Standard deduction assumed.

Federal income tax claims $4,418. FICA takes another $1,530. Before any state touches it, the raise has already shed $5,948 — a combined federal marginal burden of 29.74%. State income tax, where it applies, is pure addition on top of that. The math for quantifying your own raise value follows the same three-layer structure regardless of the dollar amount.

Why this raise crosses a bracket line

Start with taxable income, not gross wages. The 2025 standard deduction for a single filer is $15,750 (IRS, Revenue Procedure 2024-40). That drops $100,000 of gross to $84,250 of taxable income and $120,000 to $104,250.

The relevant boundary is the 24% bracket, which begins at $103,350 of taxable income for single filers in 2025 (IRS). Taxable income of $84,250 sits inside the 22% bracket. The raise pushes it to $104,250 — $900 past the line. So the increase does not get taxed at one clean rate.

Source: Author calculations, IRS 2025 single-filer brackets (Revenue Procedure 2024-40). The 22% bracket runs $48,475–$103,350 of taxable income; the 24% bracket begins at $103,350.

The 24% slice is almost trivial here — $216 on $900 of income. This is the practical rebuttal to the most common anxiety about raises, the fear of being “pushed into a higher bracket.” Only the dollars above the threshold get the higher rate. The marginal-rate scare that surrounds bracket crossings dissolves once you see that just $900 of a $20,000 raise touches the 24% rate.

FICA: the layer that often gets ignored

Federal income tax gets the attention. FICA quietly takes a flat cut that, at this income level, applies to every dollar of the raise. Social Security tax of 6.2% runs only up to the wage base, which was $176,100 in 2025 (Social Security Administration). Both $100,000 and $120,000 sit comfortably below that ceiling, so the entire raise is exposed.

Add Medicare at 1.45% — uncapped, no wage base — and the combined FICA rate is 7.65%. On $20,000, that is $1,530. The additional 0.9% Medicare surtax does not apply; it triggers only above $200,000 for single filers (IRS), and this raise tops out at $120,000.

FICA matters because it changes the framing. A worker reasoning purely from federal brackets might assume a ~22% bite and a net near $15,600. The real combined federal-plus-FICA rate on this raise is 29.74%, which is why the no-state net comes in at $14,052 rather than $15,600. The understanding of how a raise pushes into a higher bracket is incomplete without the payroll-tax layer sitting underneath it.

State tax: where the same raise diverges

Geography does more to the net than the bracket crossing does. Three workers earning the identical $20,000 raise keep three different amounts, and the spread is wider than the entire 24%-bracket effect.

Source: Author calculations. Federal income tax and FICA held constant at $5,948. State figures use 2025 marginal rates: New York 6.0% (taxable income $80,650–$215,400, single); California 9.3% (taxable income roughly $70,606–$360,659, single). City taxes (e.g., NYC local income tax) not included and would lower the net further.

The distance between a Texas resident and a California resident on this single raise is $1,860 a year. That is more than eight times the $216 attributable to crossing into the 24% federal bracket. Anyone agonizing over the bracket line while ignoring their state rate is watching the wrong variable. For New York City residents, municipal income tax compounds this further, and the comparison between job change versus promotion earnings often hinges on exactly this state-and-local layer when one option involves relocation.

The Finluxy Raise Lifetime Value

A single year’s net understates the raise dramatically. A $20,000 base increase does not vanish after one year — it becomes the new floor on which every future percentage raise compounds. The Finluxy Raise Lifetime Value captures this: the net present value of the increase across remaining working years, discounted at 5%, expressed in today’s dollars.

The mechanics use the present value interest factor of annuity (PVIFA — the multiplier that converts a stream of equal annual payments into a single present-value figure). At a 5% discount rate, PVIFA rises with the number of years the raise keeps paying. Applied to the net raise of $14,052 (the no-income-tax-state figure, federal and FICA only), the lifetime value lands far above the $20,000 headline.

Source: Author calculations. Net Lifetime Value applies the no-income-tax-state net raise of $14,052 against PVIFA at 5%. State income tax would reduce the net figures proportionally — roughly 13% lower in California. Figures assume the raise persists as a permanent base increase and exclude future compounding from subsequent percentage raises layered on top, which would push the true value higher.

A 35-year-old who lands this raise is not gaining $14,052. The decision is worth roughly $216,000 in today’s dollars over a career, even before accounting for the fact that next year’s merit increase will be calculated on $120,000 instead of $100,000. The lifetime value framework that underlies every raise calculation rewards early wins disproportionately, because each additional year of remaining career adds another discounted payment to the stream.

What the data shows that most coverage misses

Conventional raise commentary fixates on the federal bracket. The data here points elsewhere. On a $20,000 raise at this income, the bracket crossing accounts for $216 of additional tax. FICA accounts for $1,530. State tax accounts for up to $1,860. The “higher bracket” everyone worries about is the smallest of the three variables by an order of magnitude.

There is a second overlooked point in the compounding. The gross raise contracts to $14,052 after the first round of taxes — a 30% haircut in a no-tax state. But the lifetime figure expands by a factor of roughly 15 because the raise repeats annually and compounds. Taxes shrink the raise once; time multiplies it for decades. The net effect, even after the worst-case California treatment, dwarfs the single-year deposit. The case for compounding a raise early in a career rests entirely on this asymmetry.

What this means for a $150k+ household

A household already at or above $150,000 faces a different calculus at this transition, because a $20,000 raise stacked onto an existing six-figure base can push taxable income toward thresholds that the $100k-to-$120k single filer never reaches. The 32% federal bracket begins at $197,300 of taxable income for single filers in 2025, and the 0.9% additional Medicare surtax activates at $200,000 of wages. A raise that crosses those lines carries a steeper marginal cost than the 29.74% modeled here, which is why high earners should run the bracket split on their actual taxable income rather than assuming a flat rate.

The more actionable lever is pre-tax deferral. Routing part of a raise into a 401(k) lowers the taxable portion dollar-for-dollar and can keep income below a bracket or surtax threshold entirely — the difference between paying 24% on a slice now versus deferring it. For a household weighing whether to negotiate harder, the Lifetime Value table reframes the stakes: the marginal hours spent pushing a $20,000 offer to $25,000 are measured against a present-value swing of tens of thousands, an asymmetry that the methodology behind quantifying your value before negotiating makes concrete. The single-year net is the wrong denominator for that decision. The lifetime figure, discounted and after tax, is the number that should anchor it — and at a 5% discount rate over a full career, it justifies far more negotiation effort than most people invest, particularly when the timing of a raise within the calendar year shifts its first-year value as well.