The effective rate of tax that a taxpayer is paying on taxable income calculated by dividing the total taxes payable by the taxable income. The terms "average tax rate" and "effective tax rate" are synonymous.
An individual's average tax rate is the result of total income taxes paid divided by taxable income. For example, if an individual has taxable income for the year of $50,000 and paid income taxes of $10,000, the average tax rate would be 20%. ($10,000 w $50,000 = .20).