(NEXSTAR) — The IRS announced last month that it was again changing federal tax brackets thanks to inflation, giving taxpayers a higher standard deduction and earnings thresholds.

There’s a second, albeit smaller, benefit to the tax code updates (which impact 2026 and our tax filings in 2027): a slightly larger paycheck, even without a raise.

It has to do with the standard deduction, which reduces the amount of your income on which you are taxed. That threshold is set to rise by about 2.2%, a smaller jump than what we saw in 2023, 2024, and 2025.

Nonetheless, the small increase could still put more money in your pocket.

The tax code update is meant to help cut back on “bracket creep,” which occurs when inflation moves you into a higher income tax bracket or reduces how beneficial credits, deductions, and exemptions are, according to the Tax Foundation.

Say, for example, you plan to file as a single individual for the current tax year and are making $104,000. You fall into the fourth tax bracket, meaning you’re taxed 10% on the first $11,925 you earn; 12% on the chunk between $11,926 and $48,474; then 22% on what you earn between $48,475 and $103,349; and 24% on every dollar above that.

If you don’t get a raise going into 2026, and remain at $104,000, you would not reach the 24% tax bracket. Instead, you would be taxed 10% on the first $12,400 you earn; 12% on the income between that threshold and $50,400; then 22% on the rest. (This is a simple example that did not take into account the standard deduction and other tax-related aspects.)

If the brackets did not adjust, you would be stuck with a higher tax liability, despite your $104,000 salary having less buying power in 2026 because of inflation, the Tax Foundation explains.

But, because the tax brackets for 2026 were adjusted, you could see less money withheld from your paycheck for federal taxes (your employer is able to calculate how much is withheld using your W-2 and IRS documents).

Even though your paycheck may grow in 2025, financial experts say it’s important to remember you aren’t exactly receiving “extra” funds — they are intended to offset inflation. The small pay bump may also be muted if you’re facing rising insurance costs, for example.

The most recent data from the U.S. Department of Labor, which runs through the previous 12 months, ending in September, shows inflation increased to 3%, the highest point since January.