AfterTaxLabNo-income-tax states: what you keep and what you still pay
A select group of regions across the United States does not impose a state-level income tax on wages earned by employees. For residents in these areas, the payroll deduction process omits any specific state tax withholding, which simplifies the calculation of net earnings compared to states that collect a percentage of gross income. This structural choice reflects a policy preference for funding government services through other revenue streams rather than direct levies on individual labor.
Workers in these jurisdictions often see a higher percentage of their gross wages reflected in their net pay because the state tax column on a payslip remains empty. While this creates a distinct difference in payroll processing, it does not mean the absence of taxation entirely. Federal requirements and various local assessments remain consistent, regardless of whether a state mandates a personal income tax. Understanding these components helps in accurately projecting actual take-home income throughout the year.
Every zero-wage-tax state, $100,000 salary
The engine models these states as charging no income tax on wages. Federal tax and FICA are unchanged from any other state.
| State | State income tax | Take-home |
|---|---|---|
| Alaska | $0 | $79,180 |
| Florida | $0 | $79,180 |
| Nevada | $0 | $79,180 |
| New Hampshire | $0 | $79,180 |
| South Dakota | $0 | $79,180 |
| Tennessee | $0 | $79,180 |
| Texas | $0 | $79,180 |
| Washington | $0 | $79,180 |
| Wyoming | $0 | $79,180 |
The zero-wage-tax list
The engine treats 9 states as charging no income tax on wages. These states operate without a broad-based personal income tax, meaning the state government does not withhold any portion of an employee's earnings for general income tax purposes. This policy applies uniformly to all residents in these jurisdictions, regardless of their specific occupation or the industry in which they are employed. The exclusion of this tax category significantly alters the final paycheck calculation compared to jurisdictions where state income tax rates are applied as a percentage of gross wages.
What that is worth on $100,000
On a $100,000 salary that leaves take-home at $79,180. This figure illustrates the impact of bypassing state-level income taxes while still accounting for mandatory federal deductions. Because these calculations are based on a fixed annual salary, the result provides a clear baseline for comparing how different tax environments influence net earnings. Changes in salary levels would shift these totals accordingly, but the primary takeaway remains that the absence of state tax improves the proportion of income retained by the individual worker.
What is still taken out
Federal tax of $13,170 and FICA of $7,650 apply exactly as elsewhere. Even when a state does not tax wages, federal payroll obligations persist to fund national programs like Social Security and Medicare. Furthermore, property, sales and local taxes are outside the payroll model, so a zero wage-tax state is not a zero-tax state. These other forms of taxation are collected through purchases, home ownership, or municipal levies, meaning they do not appear on a standard payroll summary despite their impact on a household's overall financial burden.
No-income-tax states: common questions
Do I pay less in total taxes if I live in a state with no income tax?
While you do not pay state income tax on your wages, other taxes apply. You still pay federal obligations, including $13,170 for federal income tax and $7,650 for FICA. Because states must fund their budgets, they often rely on higher sales or property taxes to compensate for the missing income tax revenue.
Are all types of income tax-free in these states?
No-income-tax states specifically target wages. Other types of income, such as investment dividends, interest, or capital gains, are treated differently depending on the specific state laws. You should verify your state's tax code for non-wage income, as the payroll exemption described here applies only to employment earnings.
Does a zero-income-tax state mean my take-home pay is the highest possible?
Your take-home pay is higher because the state tax line is zero, which is a major advantage. On a $100,000 salary, this leaves take-home at $79,180 after standard federal deductions. However, your actual cost of living may be affected by the local and sales taxes that replace the need for wage-based revenue.
Do I still need to file a state tax return in these states?
Generally, if a state has no income tax, there is no state income tax return to file. However, you are still required to file your federal tax return every year. Always check if your specific state requires any informational filings or local-level tax returns, even if they do not collect an income tax.
Figures calculated with the AfterTaxLab 2026 engine: federal brackets and standard deduction ($16,100 single), Social Security wage base $184,500, published 2026 state rates. Estimates for planning only — not tax advice. Last verified 21 Sep 2026 · methodology.