Deferring pay can trade today's top tax bracket for a lower one later, but the payout can stack on your other income, your employer's credit risk is yours, and your state may still tax it. NQDC Calculator runs the numbers both ways, year by year, so you can see what the election is worth in your situation.
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How it works
Follow the guided setup step by step, or skip it and go straight to the inputs.
Salary, deferrable bonus, filing status, pre-tax deductions and the income you already have. Each step tells you where to find the number.
Deferral percentage and cap, how many years you'll elect, when you expect to leave, the payout schedule, and any employer credit and vesting.
Where you'll live, other income in those years, Social Security and retirement withdrawals: the things that decide which bracket the payout lands in.
See whether deferring or taking the cash comes out ahead, by how much in today's dollars, and what would have to change for the answer to flip.
What you get
Every figure traces back to an annual tax calculation for each path, so you can see why the answer is what it is.
Deferring versus taking the pay, paying tax now and investing the rest in a taxable account, both expressed in today's dollars.
The optimizer tests every whole percentage up to your plan's cap against every payout schedule offered, from a lump sum to 15 years, and charts the result.
A sensitivity matrix shows the net benefit across any two assumptions at once, such as years until you leave against default risk, or payout income against returns.
New to deferred compensation? The walkthrough explains each input in plain language and where to find it: your pay stub, last year's return, your plan's enrollment materials.
What's supported
Not a single-rate rule of thumb: each path gets its own federal and state tax calculation every year.
Ordinary brackets, the standard or your itemized deduction, qualified dividends and long-term gains stacked with the IRS worksheet, the 3.8% net investment income tax, the $3,000 capital loss deduction with carryforward, and taxable Social Security per Publication 915.
Every state with a broad income tax plus D.C., by filing status, with enacted future rate changes, state capital-gain treatment where modeled and Washington's capital gains tax. Enter custom brackets for any state, plus an optional local rate.
Model a different state at payout. Choose whether your former work state can tax the payout, or apply the federal source-tax protection (4 U.S.C. ยง114) assumption at ten or more yearly installments.
Deferred pay is an unsecured promise. Set an annual default probability and see the expected loss, plus the break-even risk at which deferring stops paying off.
Lump sum or annual installments up to 15 years, with your other income, Social Security and pre-tax retirement withdrawals in each payout year.
Employer credits on deferrals with vesting and the payroll tax they trigger, and any 401(k) employer contributions you would lose by deferring.
The best deferral percentage and payout schedule within your plan's limits, and a matrix of any two assumptions to see where the answer flips.
A year-by-year ledger, a CSV with every input and tax parameter used, a printable report, and scenarios saved to your account.
Results are restated for inflation, with an optional discount rate. Brokerage dividends are taxed every year and the account is sold on the same schedule as the payout.
Why it matters
Deferral elections are generally made before the year the pay is earned and are hard to change later. Depending on your pay, the amount deferred and how it is paid out, the difference between a good election and a poor one can run from a few thousand to tens of thousands of dollars.
Simple rules of thumb compare two marginal rates. The real answer depends on how the payout stacks on your other income, where you live, how your employer's plan credits earnings and how much risk you're carrying.
Illustrative only. Your results depend on your inputs and assumptions, and no outcome is guaranteed.
A single-year payout can stack on other income and be taxed at a higher rate than the deferral saved you.
NQDC balances are unsecured. If your employer can't pay, you may recover little or nothing.
Your former work state may still be able to tax payouts unless the federal source-tax protection applies.
Some plans base the match on pay after deferrals, so deferring can quietly cost you employer contributions.
Pricing
One low annual price covers each year's elections and that year's tax-table updates.
Everything you need to see which way the decision leans.
The optimizer, scenarios and exports for a decision worth getting right.
Billed $24.99 a year plus any applicable tax. Renews automatically each year until you cancel. Cancel anytime from your account; you keep access until the end of the year you paid for. Payments are non-refundable, except where the law requires a refund. See the Terms of Service.
For plan sponsors and benefits teams
License NQDC Calculator for your NQDC participants: your plan's terms built in, private for employees, education only. Ideal for your enrollment window.
FAQ
No. NQDC Calculator is an educational calculator. It produces hypothetical estimates from the inputs and assumptions you provide, and those estimates can be materially wrong. It doesn't recommend any election. Read your plan document and talk to a qualified tax or financial professional before you decide.
No. NQDC Calculator isn't affiliated with, endorsed by or sponsored by any employer, plan sponsor or plan administrator. You enter your own plan's terms, and your plan document governs.
Your calculator inputs stay in your browser. If you save a scenario (a Pro feature), it is stored in your account so you can reopen it later, and you can delete it at any time. We store your email address to sign you in, and Stripe handles your payment details. See the Privacy Policy.
Every state with a broad individual income tax, plus the District of Columbia, using brackets for your filing status and enacted future changes. States with no wage tax are covered too, and Washington's capital gains tax is included. If your situation is unusual, for example local income tax or a state credit, you can enter custom progressive brackets for any state and add a flat local rate.
The model runs an annual federal and state calculation for each path, but it simplifies: it doesn't cover the AMT, credits, the QBI deduction, IRMAA, the SALT cap recalculation or married filing separately, and future tax law is assumed to stay as currently enacted. Tax parameters for future years may be projections. Treat results as estimates for comparison, not a tax return.
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Yes, anytime, from your account page, which opens Stripe's secure billing portal. Cancelling stops the next renewal; you keep Pro until the end of the year you've paid for. Payments aren't refundable, except where the law requires a refund.
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