2027 Tax Brackets: What a 3.2% Inflation Adjustment Does to Your Paycheck

The IRS has not published the 2027 tax brackets yet, but the formula that sets them is in the tax code and every number it needs is already out. Run it and each bracket threshold rises by about 3.2%, the standard deduction goes to $16,600 for a single filer and $33,200 for a married couple, and someone earning $75,000 owes about $281 less federal income tax on the same pay — roughly $11 per biweekly paycheck.

This guide covers federal income tax on wages for single, married-filing-jointly and head-of-household filers. It does not cover Social Security and Medicare (FICA), state or local income tax, or credits such as the Child Tax Credit and the Earned Income Tax Credit, which have their own inflation adjustments. The worked examples assume the standard deduction and no other income, so they show the change in tax, not your exact bill.

The methodHow the IRS sets the brackets

Nobody at the IRS picks the thresholds. Section 1(f) of the Internal Revenue Code says to take the chained Consumer Price Index (C-CPI-U) — a version of the inflation index that allows for people switching to cheaper goods when prices rise — average it over the 12 months ending August 31, compare that with a base year, and scale the 2018 bracket amounts by the ratio. The result is rounded down to a multiple of $50 for joint filers and heads of household; single thresholds come out at exactly half the joint ones for every bracket below 35%, so they move in $25 steps.

The split base year is new. The 2025 tax law (Public Law 119-21, often called the One Big Beautiful Bill Act) made the seven rates permanent and gave the 10% and 12% brackets one extra year of inflation, starting in 2026. That is why the 22% bracket now starts about 1.6% higher than the old formula would put it. Rates do not change for 2027: they are still 10%, 12%, 22%, 24%, 32%, 35% and 37%.

The missing month

The 2025 government shutdown left the Bureau of Labor Statistics unable to collect October 2025 prices, and it has said that month will never be published. So the 12-month average the law asks for has only 11 months in it. The IRS has not said how it will handle the gap. Averaging the 11 published months gives an adjustment of 3.24%; filling October with the average of September and November gives 3.11%. Thomson Reuters Checkpoint built its projections on the 11 months, and Stephanie Hingtgen of the Center on Budget and Policy Priorities told Checkpoint she expects the IRS to do the same. We use the 11-month figure below and show what changes if the IRS fills the month.

The brackets2026 official vs 2027 projected

Head of household for 2027 projects to: 12% above $18,250, 22% above $69,650, 24% above $109,100, 32% above $208,300, 35% above $264,550 and 37% above $661,350 (2026: $17,700, $67,450, $105,700, $201,750, $256,200, $640,600).

The additional standard deduction for people 65 and over or blind, and the separate $6,000 senior deduction from the 2025 law, are not modeled here.

Your paycheckWhat changes at $45,000, $75,000 and $150,000

Here is the federal income tax on the same salary under the 2026 rules and the projected 2027 ones. The effective rate is the tax divided by gross pay — the share of your whole salary that goes to federal income tax. The marginal rate is the bracket your last dollar falls in, which is what an extra dollar of pay would be taxed at.

None of these people changes bracket: the single $75,000 earner pays 22% on the last dollar in both years. What changes is how much of the salary is taxed at the lower rates. The married couple on $45,000 saves less in dollars than the single earner on $75,000 because all of their taxable income is already in the 10% bracket: their only gain is the $1,000 larger standard deduction, worth $100 at 10%. The single $75,000 earner gains $110 from a $500 larger deduction taxed at 22%, and $171 from more income falling into the 10% and 12% brackets.

If the IRS fills the missing October instead, every 2027 figure in that table is between $0 and $16 a year higher — under $1 a paycheck. The change shows up in withholding from the first paycheck of January 2027, when employers switch to the new IRS withholding tables (Publication 15-T), as long as your W-4 stays the same.

Bracket creepWhy inflation adjustment exists

Bracket creep is what happens when pay rises with prices but the brackets stay put: more of the same real income lands in higher brackets, so you pay a larger share in tax without being any better off. Indexing the brackets is the cure, and it works almost exactly. Take the single earner on $75,000:

A raise that exactly matches the adjustment leaves the effective rate where it was — 10.23% in both years. A smaller raise lowers it; a bigger one raises it, because some of the raise is real income. Frozen brackets would cost this earner $281 a year at every raise level, which is what the indexing is worth to them in 2027.

The indexing does not remove all creep. Since the 2017 tax law, the brackets follow the chained index, which rose 32.3% between the 2017 base and the 12 months to August 2026, while the regular CPI-U rose 35.4%. Had the brackets kept following CPI-U, the 22% bracket for a single filer would start near $111,725 in 2027 rather than $109,125. And a raise that tracks your local prices or rent, rather than the national chained index, can still push you up.

Why a raise can come with a lower tax rate

Near a bracket line the effect is visible in the marginal rate. A single filer on $67,000 in 2026 has $50,900 of taxable income, $500 over the line where 22% starts, so their last dollars are taxed at 22%. Give them a 2% raise — less than the 3.24% adjustment — and in 2027 they earn $68,340 but have $51,740 of taxable income, now below the projected $52,025 line. Their marginal rate drops to 12%, and they owe $5,953 instead of the $6,205 they would owe on the same raise with frozen brackets.

The opposite fear — that a raise could push you into a higher bracket and leave you with less — is a myth. Only the dollars above the line are taxed at the higher rate, so a raise always leaves more after federal income tax. (Benefits with hard income cut-offs, such as some health subsidies, are a different story; see our guide to ACA premiums in 2027.) If your raise is below inflation, the tax code is not the problem: as our inflation and raises guide shows, the shortfall is in what the pay buys.

What to do nowBefore January payroll

Tipped and hourly workers should know the 2027 thresholds interact with the deductions for tips and overtime: those lower taxable income first, so the saving is the deduction times your marginal rate — our tips and overtime guide walks through it. The 401(k) limit for 2027 is covered in how September's CPI settled it at $25,500.

Where these numbers come fromOur method

• Law: Internal Revenue Code §1(f)(3), (f)(6) and (f)(7) (cost-of-living adjustment, C-CPI-U averaged over the 12 months ending August 31, rounding down), §1(j)(2)–(3) (2018 bracket amounts, 2017 base year; 2016 base for the 10% and 12% brackets from 2026 under Public Law 119-21), §63(c) (standard deduction; 2025 amounts of $15,750 / $31,500 / $23,625 indexed from a 2024 base). Statute text read on law.cornell.edu.
• Index data: C-CPI-U, all items, U.S. city average, not seasonally adjusted (BLS series SUUR0000SA0), downloaded through the St. Louis Fed's FRED and ALFRED mirrors on October 25, 2026. September 2025–August 2026 has 11 published values; the 11-month average is 182.856, or 182.629 with October filled by interpolation.
• Check: the IRS computes each year with index values as first published, and those are revised later. Using the values as published at the end of each September, the same code reproduces all 75 bracket thresholds in the IRS revenue procedures for 2023, 2024, 2025 and 2026, plus the 2026 standard deductions, with no misses. With today's revised values, the same code misses 16 of the 21 figures for 2026 by $25–$400, which is why the vintage matters.
• Tax examples: wages are the only income; standard deduction; no credits, no pre-tax deductions; effective rate is tax ÷ gross wages. Real paychecks also reflect benefits deductions and W-4 choices, so the per-paycheck saving is an estimate.
• Bias: using 11 months instead of 12 makes the adjustment about 0.13 percentage points larger, so our thresholds are at the high end of the plausible range and the tax savings slightly larger than they would be if the IRS fills October — by up to $16 a year in the examples.

This post will be updated with the official figures when the IRS publishes the 2027 revenue procedure.

FAQFrequently asked questions

What are the 2027 federal tax brackets?
Not official yet. Our projection for single filers: 10% up to $12,800 of taxable income, 12% to $52,025, 22% to $109,125, 24% to $208,325, 32% to $264,550, 35% to $661,375 and 37% above that. Married couples filing jointly: $25,600, $104,050, $218,250, $416,650, $529,100 and $793,650.

What is the 2027 standard deduction?
Projected at $16,600 for single filers, $33,200 for married couples filing jointly and $24,950 for heads of household, up from $16,100, $32,200 and $24,150 in 2026.

When will the IRS release the 2027 tax brackets?
In a revenue procedure that usually comes out between early October and mid-November. The 2026 figures came on October 9, 2025. As of October 25, 2026, the 2027 one has not been published.

How much is the 2027 inflation adjustment?
About 3.24% if the IRS averages the 11 months of inflation data that exist, or 3.11% if it estimates the October 2025 month that was never collected. Each bracket threshold rises by about that much.

Does moving into a higher tax bracket mean I take home less?
No. Only the income above a bracket line is taxed at the higher rate, so a raise always increases your pay after federal income tax. Your effective rate rises slowly and smoothly, not in jumps.