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Tax-Exempt to Taxable Yield Comparison Calculator

Find the taxable yield matching a tax-exempt yield under one assumed marginal rate.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A tax-exempt yield of 4% and an assumed marginal tax rate of 20% give a taxable-equivalent yield of 5%.

Taxable-equivalent yield = tax-exempt yield ÷ (1 − assumed marginal tax rate)

Worked example

Enter these known values and leave the other values blank.

Assumed tax-exempt yield
4 %
Assumed marginal tax rate
20 %
Taxable equivalent yield
5 %

Assumptions and limitations

  • No. Supply the applicable rate and verify the assumed exemption separately. This one-rate model excludes differing federal/local treatment, surtaxes, phaseouts, capital gains and differences in investment risk. It does not contain current tax tables.
  • Use consistent units, dates and financial definitions. The calculated result follows the stated assumptions and the amounts entered.

Common questions

Does this determine whether an investment is tax-exempt for me?

No. Supply the applicable rate and verify the assumed exemption separately. This one-rate model excludes differing federal/local treatment, surtaxes, phaseouts, capital gains and differences in investment risk. It does not contain current tax tables.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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