Tax Equivalent Yield Calculator

Compare tax-free and taxable bond yields

Municipal bond interest is often exempt from federal income tax (and sometimes state tax). To compare a muni to a taxable corporate or Treasury bond, convert the tax-free yield to a taxable-equivalent yield using your marginal tax bracket.

Pair this with the Bond Current Yield Calculator or Bond Equivalent Yield Calculator for broader fixed-income analysis.

Taxable-equivalent yield

When you know a tax-free yield $y$ and marginal tax rate $t$, the taxable equivalent is $TEY = \frac{y}{1-t}$. To see what a taxable bond nets after tax, multiply the stated yield by $(1-t)$.