Effective Corporate Tax Rate Calculator





Effective Corporate Tax Rate Formula

The formula to calculate Effective Corporate Tax Rate is:

\[ \text{Effective Corporate Tax Rate} = \frac{\text{Income Tax Paid}}{\text{Earnings Before Tax (EBT)}} \times 100 \]

Description

The Effective Corporate Tax Rate (ETR) is a measure of the tax rate that a company effectively pays on its earnings. This metric helps in understanding the actual tax burden on a company as opposed to the statutory tax rate.

Example Calculation

Let's assume the following:

To calculate the Effective Corporate Tax Rate:

\[ \text{Effective Corporate Tax Rate} = \frac{275,000}{1,500,000} \times 100 = 18.33\% \]

Therefore, the Effective Corporate Tax Rate is 18.33%.