Benjamin Franklin once said, “In this world, nothing is certain except death and taxes.” All these years later, his words still ring true. No matter how much you earn, paying taxes is inevitable. However, how much of your paycheck you actually take home depends on a few factors—especially where you live.
Every state in the U.S. has its own way of handling taxes. So, how much does the average American household keep after paying taxes? The answer isn’t simple because income levels vary across the country, and tax rates differ from state to state. Luckily, recent research from GOBankingRates has broken down take-home pay by state. Below, we’ll take a look at what families in different parts of the country are left with after taxes.
States with the highest take-home pay
Several states stand out when it comes to higher incomes after taxes. These states tend to have a combination of higher median household incomes and favorable tax policies.
- Massachusetts
Median Household Income: $147,219
Take-Home Pay After Taxes: $98,860
- Maryland
Median Household Income: $145,017
Take-Home Pay After Taxes: $101,484
- New Jersey
Median Household Income: $142,693
Take-Home Pay After Taxes: $95,463
- Virginia
Median Household Income: $126,871
Take-Home Pay After Taxes: $91,389
These states generally have higher living costs, but the after-tax income reflects the higher earnings.
States with moderate take-home pay
A few states lie in the center, providing a good level of incomes and take home pay after taxes. These states may not offer the highest earnings but because of their tax policies, families are able to keep a good chunk of their earnings.
- Florida
Median Household Income: $96,830
Take-Home Pay After Taxes: $73,589
- Georgia
Median Household Income: $106,678
Take-Home Pay After Taxes: $76,626
- Texas
Median Household Income: $106,865
Take-Home Pay After Taxes: $79,745
- Utah
Median Household Income: $109,305
Take-Home Pay After Taxes: $78,259
In these states, families can expect to take home a decent percentage of their income, which is good news for residents who may face lower living costs than high-income states.
States with lower take-home pay
There are a few states where the take home salary after taxing is not crushing EMIs. Average salaries in those states are likely to be lower but the tax structure is more aggressive. People living in those states may find they have little left over from what can be taken by Uncle Sam.
- West Virginia
Median Household Income: $84,598
Take-Home Pay After Taxes: $62,012
- Mississippi
Median Household Income: $87,568
Take-Home Pay After Taxes: $64,505
- Kentucky
Median Household Income: $91,578
Take-Home Pay After Taxes: $67,691
While these states may offer a lower cost of living, the take-home pay after taxes tends to be lower than the national average.
Take home note: The location that you inhabit influences significantly the money that you take home after taxes. States with high incomes and low tax rates usually have attractive take-home pay, but even those with low median incomes can offer advantages on the basis of cost of living. Taxes are a must-responsibility of every citizen wherever he or she resides, but knowing how much is take-home pay will help in making better financial plans.
