The States That Withhold the Most — and Least — From Your Paycheck

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Thanks to withholding rules, your take-home pay might be almost $150 less in one state than in other states.

When I moved from Indiana to Florida two years ago, I was excited not for the climate change but for the tax change.

Indiana taxes residents’ income, but Florida does not. For me in 2015, that meant I’d keep at least an extra 3.3 percent of my paychecks after the move.

Crossing state lines can make a big difference in your take-home pay. In fact, one state — Hawaii — withholds more than $542 from every median-salary worker’s paycheck, a recent GOBankingRates analysis found. By contrast, several other states withhold just under $403.

For the analysis, the financial data site calculated how much money is withheld per paycheck in every state and Washington, D.C., for a worker making $50,000 a year.

Depending on the state, these withholding amounts can include:

  • Federal income taxes
  • Federal Insurance Contributions Act (FICA) taxes — better known as Social Security and Medicare taxes
  • State income taxes
  • Family leave insurance
  • Unemployment insurance

GOBankingRates found that the worst state for withholding for someone who makes $50,000 a year — or $1,923.08 biweekly — is Hawaii. From every paycheck, $542.24 would be withheld.

For someone making a median-range salary of $50,000, the five worst states for withholding are:

  1. Hawaii
  2. Oregon
  3. Idaho
  4. South Carolina
  5. Minnesota

The study also looked at the impact on higher-salary workers. For someone who makes $100,000 a year, the worst states are:

  1. Oregon
  2. California
  3. Hawaii
  4. Idaho
  5. Washington, D.C.

The states that take the least money out of residents’ paychecks have a key characteristic in common: no state income tax. These states are:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

In all of these states except Alaska, $402.93 would be withheld from the biweekly paycheck of someone who earns $50,000 a year.

In Alaska, which withholds money for a state unemployment tax, $412.55 would be withheld from the biweekly paycheck of someone with a $50,000 salary.

To see exactly how much is withheld in every state, check out the full analysis by GOBankingRates.

While withholding amounts might comprise a big chunk of a paycheck in any state, they aren’t the only financial factor to consider when crossing state lines. To learn about other factors, check out:

How would you rate your state based on financial factors? Let us know below or on Facebook.

Stacy Johnson

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