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Effective Corporate Tax Rate Calculator

Effective Corporate Tax Rate Calculator can help you determine your company's effective tax rate with just a few clicks. Simply enter your company's financial information and our calculator will do the rest.

Understanding Effective Corporate Tax Rate

What is an effective corporate tax rate?

The effective corporate tax rate is a financial ratio that measures the corporate income tax in regards to the entity’s taxable income. It answers the question, “what percentage of its taxable income is paid out in taxes?” Taxable income refers to a business’s earnings after accounting for depreciation, corporate giving, and other tax-reducing efforts.

Finally, the effective corporate tax rate typically accounts for only federal income taxes — not state and local taxes, property taxes, or sales tax.

What is the Effective Corporate Tax Rate formula?  

The effective corporate tax rate formula looks like this:

effective corporate tax rate = income tax paid / EBT

Income tax paid refers the actual amount of tax paid to the government for the tax year. EBT stands for earnings before tax, but after subtracting operating expenses, interest, and the cost of goods sold (COGS). EBT is almost always present on the income statement. 

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Common effective corporate tax rate questions

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