Tax-Equivalent Yield Calculator

Compare the after-tax yields based on marginal tax brackets.

Input Parameters

%

Must be between 0% and 99%.

%

Must be between 0% and 99%.

%

Yield must be 0% or greater.

Assumption: Calculations use additive tax rates and assume state taxes are not deducted on federal returns (due to standard deduction or SALT caps).

Fully Taxable

0.00%

State Tax-Free

0.00%

Fed Tax-Free

0.00%

100% Tax-Free

0.00%

Equivalent Yield Comparison

How the Math Works

The Tax-Equivalent Yield (TEY) shows what a taxable investment would need to earn to match the after-tax return of a tax-exempt investment.

  • Fully Taxable: Subject to both Fed & State taxes (e.g., Corporate Bonds, CDs).
  • State Tax-Free: Subject to Fed tax only (e.g., U.S. Treasuries).
  • Fed Tax-Free: Subject to State tax only (e.g., Out-of-state Municipal Bonds).
  • 100% Tax-Free: Exempt from both (e.g., In-state Municipal Bonds).

Core Formulas:

After-Tax Return = Yield × (1 - Applicable Taxes)

Equivalent Yield = After-Tax Return ÷ (1 - Applicable Taxes)

Current computation breakdown:

Base After-Tax Return = –

Fully Taxable: –

State Tax-Free: –

Fed Tax-Free: –

100% Tax-Free: –