What is the formula to find the effective tax rate (ETR)?

The effective tax rate (ETR) is calculated by multiplying the applicable tax rate (TR) by the assessed tax liability (ASL). This calculation provides a clear understanding of the actual rate at which income is taxed, taking into account the various factors that may apply to a taxpayer's situation.

Using this approach, the effective tax rate reveals the proportion of the total income that is paid in taxes, making it a useful metric for evaluating tax burdens across different entities or individuals. The formula effectively captures both the base amount to which the tax rate is applied and the rate itself.

In contrast, the other formulas presented do not reflect the proper method for calculating the effective tax rate. They either combine components improperly or do not denote the fundamental relation between the taxable income and the tax liabilities. Each alternative does not yield the correct representation of how ETR is derived in financial analysis or appraisal contexts.