Although the District exempts Social Security income, a steep 8.5% tax rate hits other income over $40,000. (The top income tax rate of 8.95% is reserved for taxable income over $350,000.) But many A single person making between $0 and $9,325, the tax rate is 10% of taxable income. For a single person making between $9,325 and $37,950, it’s 15%. The good news is you only pay 10% on all income up to $9,325, then 15% on income up to $37,950, and so on. 15% (Federal tax) + 6.2% (FICA) + 1.45 (Medicare) + 6% (Income tax) = 28.65%. This number means that 28.65 cents of every dollar that the Joneses earn go towards taxes. That’s nearly one-third! Retirement Effective Tax Rate. In the above example, the Smiths are still working and earning a wage.