Your marginal rate is the rate that applies to the last unit of income you earn. It is the relevant number for any decision about earning more: taking a bonus, working overtime, contributing to pension or doing freelance work on the side.
The marginal rate is almost always higher than the effective rate, because lower slices of income are taxed at lower rates. In Germany and France marginal rates can reach 45% (plus surcharges), pushing real marginal costs of additional income above 50% once social contributions are included.
Tax planning targets the marginal rate. Pillar 3a contributions in Switzerland or Riester-Rente contributions in Germany are deductible from taxable income, so the tax saving equals the contribution times the marginal rate.
Marginal tax rate = ΔTax / ΔIncome
A Swiss employee in the 30% marginal bracket who contributes the maximum pillar 3a of CHF 7,258 saves roughly CHF 2,177 in tax that year.