State Taxes on Your Paycheck: Who Takes the Most in 2025-2026?

If you’ve ever stared at your pay stub and wondered, “Where did the rest of my money go?”, you’re not alone. In 2025-2026, the slice taken from your paycheck depends on more than just federal taxes.

State income taxes, city and county surcharges, and a growing set of state-run insurance programs all change how much actually lands in your bank account. Some places barely touch your wages; others take a noticeable bite—especially if you live in a big metro with extra local taxes.

This guide breaks down every major factor that affects your take-home pay at the state and local level, how 2025-2026 rules typically show up on pay stubs, and what kinds of workers tend to see the biggest differences by state.

Rather than relying on a single number, we’ll show you how to think about the whole tax stack—so you can compare smartly, avoid surprises, and use that knowledge to negotiate, relocate, or plan your budget with confidence.

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What counts as the “state take” from your paycheck?

When people ask which state “takes the most,” they often mean state income tax. But if you limit the comparison to just that, you’ll miss major items that also leave your paycheck before you see a dime. A realistic view of the “state take” includes:

1. State Income Tax
   The big one. Many states use graduated brackets (higher rates as income rises), while a handful use a flat rate. A few levy no wage income tax at all.
2. Local Income Taxes
   Cities and counties in some states add their own income taxes (e.g., several municipalities in Ohio and Pennsylvania, New York City, many Maryland counties). If you live or work there, those taxes are withheld like state tax.
3. State Disability Insurance (SDI) & Paid Leave Programs
   A growing number of states fund paid family/medical leave, temporary disability insurance (TDI/SDI), or long-term care programs via payroll deductions. These show up on your stub as a percentage of wages (sometimes up to a cap). Examples include California SDI, New Jersey TDI/FLI, New York SDI/PFL, Massachusetts Paid Family and Medical Leave, Oregon Paid Leave Oregon, Colorado FAMLI, and Washington State’s long-term care program. The specific acronyms and rates vary, but the common thread is: these are state-level deductions from your paycheck.
4. Other State-Specific Payroll Deductions
   Some states assess small surcharges to fund transit or workforce benefits; others leave these to localities. Always read your stub’s “state” and “local” sections—if it’s a compulsory payroll program created by the state or your locality, it belongs in this comparison.

Not included in the “state take”: employer-paid taxes like State Unemployment Insurance (SUTA). Those affect your employer’s cost, not your net pay. Also excluded are benefit elections you voluntarily choose (401k contributions, health premiums, etc.), even though they lower your net pay.

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The anatomy of a 2025-2026 paycheck (state & local portion)

A typical pay stub for 2025-2026 will show:

• State income tax withholding (by your state’s bracket or flat rate, calibrated to your W-4/W-4-equivalent details).
• Local income tax (if applicable, based on your residence or workplace).
• State insurance programs (e.g., SDI, paid family/medical leave, long-term care) that appear as a percentage of taxable wages, sometimes with a wage cap.

Because brackets and caps create non-linear effects, two workers earning different salaries in the same city can experience very different “state take” percentages.

A capped payroll contribution hurts middle-income workers less as income rises past the cap; a progressive bracket bites more at higher wages; a flat local tax keeps scaling with each raise. Your filing status (single vs. married), the number of dependents, and pre-tax deductions (like 401k) all affect the calculation too.

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2025-2026 trendlines shaping the state bite

While each state sets its own details, there are a few broad 2025-2026 dynamics to understand:

• Shifts from pure income tax to payroll-style programs: Many states now fund social insurance via small paycheck deductions. Even states with modest (or no) income tax may still have state-run benefits deducted from wages.
• Local surtaxes matter more in big metros: If you live or work in a city with an income tax, your “state+local” share can rival or exceed states with high state income tax but no local levy.
• Caps vs. uncapped contributions: Some payroll programs cap contributions at a wage base; others apply the rate to all wages. Caps usually reduce the marginal “state take” at higher incomes.
• Remote work rules: Where you work vs. where you live can affect withholding. Some states tax based on workplace location, others by residency, and some have reciprocity agreements. In hybrid or remote setups, this can change your result dramatically.

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Which places typically take the most?

Without diving into exact percentage points for every state and city, we can confidently say that workers often see higher state+local paycheck deductions in places with (1) graduated state income tax, (2) city/county income tax, and (3) at least one state payroll insurance program. In practice, this often includes:

• New York (especially New York City): State income tax + NYC resident tax + paid leave programs. High earners in NYC typically experience one of the highest combined state+local bites.
• New Jersey: Progressive state income tax + employee contributions for temporary disability and family leave.
• California: Progressive state income tax + SDI. No local income tax for most, but the SDI and the progressive brackets make the paycheck bite material, especially at upper brackets.
• Oregon: Progressive state income tax + Paid Leave Oregon payroll contributions. Portland-area workers may also encounter local taxes (not everywhere, but certain transit/education levies can apply).
• Minnesota: Progressive state income tax structure; while local income taxes are limited, the brackets can still generate a noticeable bite at moderate to higher incomes.
• Hawaii, Vermont, District of Columbia: Smaller populations but progressive tax structures; DC isn’t a state, but many workers there see substantial combined state-style deductions.
• Maryland: State tax plus a county-level income tax that functions like a local surtax, varying by county.

In short: a state income tax + a city/county tax + a state payroll insurance program tends to push total paycheck deductions to the high end.

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Which places typically take the least?

At the other end, the “least state take” often appears where wage income isn’t taxed and few or no state payroll deductions exist. Historically, the no-wage-tax states are:

• Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming
• Washington (no wage income tax but does have a state long-term care payroll program)
• New Hampshire (no wage income tax; interest/dividends tax has been phasing out)

Among these, Florida, Texas, South Dakota, Wyoming, Nevada, Alaska tend to provide very low state-paycheck friction for many workers.

Washington State stands out because, despite no wage income tax, its long-term care program collects via payroll, which is a meaningful line item for some employees. New Hampshire generally has a minimal take from wages, though residents should be mindful of evolving rules around investment income.

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The role of local income taxes (the quiet swing factor)

Local income taxes can flip a comparison on its head. Consider two hypothetical single workers earning the same salary:

• Worker A in a state with no state income tax but a city tax of ~2%
• Worker B in a state with a flat 3% state income tax but no local tax

Depending on wages and other deductions, Worker A might pay more on net than Worker B—even though Worker A’s state technically has “no state income tax.” This is why smart comparisons look at the combined state+local take, not just the headline state policy.

Local taxes vary widely. Cities in Ohio and Pennsylvania often levy local income taxes; New York City has one of the most prominent local taxes; Maryland counties impose their own rates; and some metro areas impose special payroll levies to fund transit or schools.

Always check both your home city/county and your work city/county—some local rules hinge on where you work, others on where you live, and some consider both.

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Don’t forget the state insurance programs

The alphabet soup—SDI, TDI, PFML, FAMLI, LTSS—can be confusing, but the logic is simple: states are increasingly funding worker benefits through small, steady paycheck contributions. A quick tour of common programs:

• Temporary Disability Insurance (TDI/SDI): Deducted as a % of wages (sometimes with a wage cap). Seen in states like California, New Jersey, New York, and a few others under varying names.
• Paid Family & Medical Leave (PFML/FAMLI): Funds paid leave for caregiving, medical issues, or bonding with a new child. Usually split between employer and employee; the employee portion shows up as a payroll deduction.
• Long-Term Care (LTC/LTSS): Still unusual but notable (e.g., Washington State). Provides future long-term care benefits funded by a payroll contribution.

The key nuance for your paycheck is whether a program is capped. If the deduction applies to the first X dollars of wages, high earners hit the cap quickly and see the effective rate fall as a share of total pay. If uncapped, the percentage bites every dollar you make.

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Three salary scenarios: how state+local bites differ

To see how these pieces combine, let’s model three illustrative (not official) scenarios. We’ll ignore federal taxes and benefits you choose (401k, medical, etc.) to focus on state+local effects. The numbers below are simplified to demonstrate relative, not exact, differences:

Scenario 1: Single worker at $40,000

• High-tax city in a progressive-tax state:
  • A modest state bracket on $40k + a city income tax of ~2% + a small paid-leave/SDI deduction of ~0.5–1% of wages could combine to roughly 3–5% of gross pay in state+local deductions, depending on exact rules.
• No-income-tax state with no local tax and minimal payroll programs:
  • Potentially near 0% to ~0.5% (if there’s a small state insurance program).
• No-income-tax state with a local tax:
  • Could still hit 1–2% (or more) if the city tax is significant.

Takeaway: At $40k, local taxes and uncapped payroll programs punch above their weight because the state income tax bracket may be modest.

Scenario 2: Single worker at $75,000

• High-tax city in a progressive-tax state:
  • State bracket rises + city tax still scales + state insurance programs continue. Combined might land at 5–7% of gross in some places, sometimes more.
• Flat-tax state (no local tax) with limited payroll programs:
  • Often in the 2–4% zone.
• No-income-tax state, no local tax:
  • Frequently ~0–1% (if a small payroll program exists).

Takeaway: As income rises, progressive brackets and uncapped payroll contributions make big-city, high-tax states more expensive on each paycheck.

Scenario 3: Single worker at $150,000

• High-tax city in a progressive-tax state:
  • Upper brackets + uncapped local tax + possibly uncapped (or high cap) payroll programs = commonly 7–10%+ of gross, depending on where you live/work.
• Flat-tax state (no local tax):
  • Roughly 3–5%, give or take, depending on the flat rate and any payroll program.
• No-income-tax state, no local tax:
  • Often ~0–1% (again, if there’s a payroll program at all).

Takeaway: For high earners, the state bracket structure and the presence of a local income tax drive the biggest differences.

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Filing status & dependents: why your friend pays less

Two coworkers earning the same salary can have different state withholding because:

• Filing status: Married filing jointly vs. single often changes brackets, thresholds, and standard deductions at the state level.
• Dependents: State credits and allowances lower taxable wages or provide refundable credits that reduce overall withholding.
• Multiple jobs: If you hold two jobs and don’t coordinate your withholding, each employer might treat you as if that job’s wages were your only income, under-withholding for the year. You’ll reconcile at tax time.

Always update your state withholding form when your life changes—marriage, children, or a second job. The “wrong” allowances can make your paycheck look better today and your tax bill worse tomorrow.

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Remote, hybrid, and cross-border work: the residency puzzle

In 2025-2026, lots of people work across state lines—physically or virtually. That raises questions:

• Where is your income taxed? Many states tax residents on all income, with credits for taxes paid to other states. Others tax based on where the work is performed. Some pairs have reciprocity agreements that prevent double taxation of wages.
• Who issues withholding? Your employer generally withholds for the state where you work, but if you live elsewhere, you might need to give your employer a reciprocity form or make estimated payments to your home state.
• Local taxes: Some localities tax based on workplace; others on residency. Policies evolved during and after the pandemic, and enforcement can vary.

If you live in one state and work in another (or frequently travel for work), bring HR and a tax professional into the loop. It’s much better to set payroll correctly than to scramble at filing time.

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“Most vs. least” in plain English (typical patterns)

While the exact pecking order wiggles year to year and person to person, here’s a plain-English cheat sheet for 2025-2026 patterns:

• Most likely to feel high: New York (especially NYC), New Jersey, California, Oregon, Minnesota, Vermont, DC, parts of Maryland (because of county rates), and select cities in Ohio/Pennsylvania with notable local taxes—particularly once you add a state insurance program on top of income tax.
• Often moderate: States with flat (or modest) income tax rates and minimal local taxes, or those with one small payroll program but no local income tax.
• Often lowest: Florida, Texas, South Dakota, Wyoming, Nevada, Alaska (little to no state take from wages). Washington State is a special case—no wage income tax, but its long-term care payroll deduction means your stub isn’t entirely free of state items.

Remember, local taxes can move a jurisdiction up or down more than people expect. Also, different salary levels can reorder the “who takes the most” list because of caps, brackets, and phase-outs.

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Negotiating offers across states (and cities)

If you’re comparing jobs in different locations, ask for the gross pay and estimate the state+local take:

1. Run two sample paychecks: one for each location (same salary, same benefits).
2. Include local taxes: Don’t stop at the state rate—check the city/county.
3. Add state programs: Account for SDI/PFML/LTC contributions (look for caps).
4. Consider purchasing power: A “low-tax” paycheck in a very high cost-of-living area may still feel tighter than a “higher-tax” paycheck in a moderate-cost city.
5. Ask about remote policy: If the employer is flexible, your tax picture might improve by living in a different county or state, consistent with company rules and tax law.

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How families should think about it

For couples and parents, marginal rates and credits change the math:

• Married filing jointly usually expands bracket thresholds, which can lower the average rate compared to two singles with the same combined income.
• Child and dependent credits at the state level can improve your paycheck trajectory throughout the year.
• Childcare costs might be deductible or credit-eligible in some states, reducing tax burden (even if you don’t see it directly in paycheck withholding).
• Second earner effects: Adding income can push you into higher brackets or phase out credits; coordinate withholding to avoid year-end surprises.

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Why your paycheck can still be off (and how to fix it)

Even with perfect state tables, paychecks sometimes under- or over-withhold:

• You changed your allowances mid-year or didn’t update residency status after moving.
• Multiple jobs cause each employer to “underestimate” your total annual income.
• Bonuses often use a supplemental withholding method that may not match your usual bracket.
• Lumpy income (overtime, commissions) makes per-paycheck tables imperfect.

Solutions: Submit an updated state withholding form, ask payroll to withhold an extra flat dollar each period, or—if you’ve been over-withholding—dial it back so your net pay is steadier.

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Practical tips to reduce your state-side bite (legally)

You can’t change your state’s tax code, but you can improve your personal outcome:

• Maximize pre-tax benefits (401k/403b, HSA, FSA) when allowed by your state—these lower taxable wages and sometimes affect state brackets.
• Check reciprocity if you work across state lines—file the right form with your employer to avoid double withholding.
• Revisit withholdings after life events (marriage, children, home purchase) so your state withholding reflects new credits/deductions.
• Evaluate location flexibility: If remote work is an option, living in a nearby county/city without a local tax can save thousands per year—as long as it’s compliant with employer policies and tax rules.
• Watch wage caps: If your state payroll program caps at a certain wage base, the effective rate drops past that point—plan big expenses or savings moves with that timing in mind.

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A quick “Who-Pays-More” mental model

When scanning a new job location, run this mental checklist:

1. Does the state tax wage income?
   • No: proceed to #2.
   • Yes: Is it flat or graduated? Graduated systems generally bite more as you climb.
2. Does the city/county tax income?
   • If yes, how much? This can rival state rates in some metros.
3. Which state payroll programs apply?
   • SDI/PFML/LTC and whether they’re capped. Uncapped = bigger bite at high incomes.
4. What’s my salary band?
   • Entry-level, mid-career, or senior comp will interact differently with brackets and caps.
5. Any special rules for commuters or remote workers?
   • Reciprocity, resident vs. nonresident rules, employer location policy.

The more “yes” answers you accumulate, the more likely that location sits on the higher-take end for 2025-2026 paychecks.

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FAQ: (2025-2026 )

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Putting it all together: a 2025-2026 Snapshot

• High-take environments combine progressive state income tax, local income tax, and state payroll programs (SDI/PFML/LTC). Think NYC (state + city), parts of New Jersey, California (with SDI), Oregon (with paid leave), Minnesota, Vermont, DC, and select counties in Maryland.
• Low-take environments feature no state income tax, no local tax, and minimal payroll programs—commonly Florida, Texas, Wyoming, South Dakota, Nevada, Alaska. Washington State is almost low-take but includes a notable payroll deduction for long-term care.
• Your salary band matters: caps dampen the bite for high earners on some programs, while progressive brackets increase it.
• Local taxes can re-rank states fast—always check the city/county layer.
• Remote work can help or hurt depending on policies and reciprocity—configure payroll correctly to avoid headaches.

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A simple next step you can take today

Grab two recent pay stubs—one from you and one (with sensitive info hidden) from someone you know in another state or city. Circle every state and local line item. Add them up and divide by gross pay for that period. That percentage is your state+local paycheck bite. Do the same for the other stub. You’ll instantly see why relying on a single “state rate” can be misleading—and you’ll have a practical feel for where you stand in 2025-2026.

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Final Word

“Who takes the most in 2025-2026?” isn’t a one-line answer—it’s a stack of policies. States with progressive income taxes, big-city local taxes, and robust payroll insurance programs usually take the largest slice of each paycheck. States with no wage income tax and few payroll programs take the least. Everyone else falls somewhere in between, with your salary, family, city, and work pattern shifting the result up or down.

If you’re planning a move, weighing two offers, or just trying to stretch your paycheck further, look at the full picture—state, local, and payroll programs—so you can make the smartest choice for your 2025-2026 finances.