Comparisons
Best US States for Take-Home Pay — Ranked
How no-income-tax states stack up, and why the highest take-home isn't always the best deal once cost of living is counted.
By Praveen · 5 min read · Updated August 2026
Why your state matters as much as your salary
Two Americans earning the same $100,000 can end up thousands of dollars apart in take-home pay, purely because of where they live. Federal income tax and FICA are identical nationwide, but state income tax ranges from nothing at all to north of 13% at the top in California. For a remote worker free to choose where to live, closing that gap is one of the largest, easiest wins available — often bigger than a pay rise once tax is accounted for.
The catch is that 'best take-home' and 'best value' are not the same thing. A state can claw back its income-tax saving through higher property or sales taxes, and an expensive no-tax city can erase the benefit in rent. The ranking below therefore starts with tax, then layers on the cost of living that actually decides how far the money goes.
| State | Note |
|---|---|
| Texas | No income tax; higher property tax |
| Florida | No income tax; popular with retirees |
| Washington | No income tax; high Seattle costs |
| Nevada | No income tax; tourism-funded |
| Tennessee | No earned-income tax |
| Others | AK, NH, SD, WY |
The nine states with no income tax
Nine states levy no tax on wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. On the same salary, residents of these states keep more of their paycheck than someone in California or New York — often thousands of dollars a year.
For high earners especially, the difference is large: a 10%+ top state rate in California versus 0% in Texas is a meaningful chunk of income.
But take-home isn't the whole story
No-income-tax states still need revenue, so they often lean on higher property taxes (Texas), sales taxes (Washington) or specific levies. And the highest-take-home states aren't always the cheapest to live in — Washington has no income tax but expensive Seattle housing.
The real winner is a low-tax state with a reasonable cost of living. That's why Texas and Florida cities have attracted so many movers, while expensive no-tax cities offer a smaller real gain.
How to rank them for yourself
Don't rank states by tax rate alone. Take your salary, compute take-home in each state with our calculator, then divide by the local cost of living — especially rent. A slightly higher tax in a much cheaper city can leave you better off.
For remote workers who can live anywhere, this calculation is one of the highest-value financial decisions you can make.
No income tax does not mean low tax
States without a wage income tax still need revenue, and they raise it somewhere visible. Texas and New Hampshire lean heavily on property tax, with effective rates among the highest in the country — on a family home that can exceed what a moderate state income tax would have cost. Washington relies on one of the highest combined sales tax rates. Nevada draws heavily on gaming and tourism levies that residents pay indirectly.
The honest way to compare is total state and local tax burden as a share of income, not the income tax line alone. On that measure the no-income-tax states still tend to come out ahead for high earners, because property and sales taxes are regressive relative to income — but the advantage is narrower than the headline suggests, and for a renter on a modest salary in a high-sales-tax state it can disappear entirely.
Reciprocity, remote work and the state you actually owe
Living in one state and working in another is common and is where the rules get sharp. Some pairs of states have reciprocity agreements letting you pay only where you live; most do not, and you file a non-resident return in the work state and claim a credit at home. The credit usually prevents double taxation but not the paperwork.
Remote work added a harder problem. A handful of states apply a convenience-of-the-employer rule, under which days worked remotely for an employer based in that state are treated as worked there — so a resident of one state working from home for a New York employer can owe New York tax on that income anyway. If you are remote across a state line, establish which rule applies before your first filing rather than after it.
Salary follows cost, and the comparison has to as well
The states with the highest income tax rates are frequently the states with the highest salaries for the same role, because employers price against a local cost base. A software engineer in California and one in Texas are not being offered the same number, so comparing the tax rates without comparing the offers is comparing half the equation.
Housing usually decides it. A tax saving of a few thousand dollars is easily erased by a mortgage or rent that is higher by more each month, and just as easily amplified by one that is lower. Work out take-home in each state on the actual offers you have, subtract a realistic housing cost for the place you would actually live, and compare the residual — the rate table alone has never answered this question well.
Related
Frequently Asked Questions
+Which US state has the best take-home pay?
The nine no-income-tax states (Texas, Florida, Washington, Nevada, Tennessee, Alaska, New Hampshire, South Dakota, Wyoming) leave the most of your paycheck. But factor in property/sales taxes and cost of living — a cheaper low-tax city often beats an expensive one.
+Do no-income-tax states have higher other taxes?
Often, yes. They raise revenue through higher property taxes (Texas) or sales taxes (Washington) instead. The income-tax saving is still real, but the total tax picture is closer than the headline suggests.
+Which states have no income tax on wages?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming levy no tax on wage income. Several of them recover the revenue through notably high property or sales taxes, so the total burden is not as different as the income-tax line implies.
+If I work remotely across a state line, which state do I pay?
Usually the state where the work is physically performed, with a credit in your home state to prevent double taxation — unless a reciprocity agreement lets you file only at home. The exception that catches people is the convenience-of-the-employer rule in a few states, which can treat remote days as worked at the employer's location regardless of where you sat.
Estimate only — not tax advice. Figures are estimates based on publicly available tax rules and may not reflect your full circumstances. See our methodology & sources (last reviewed June 2026). Always confirm with an official tax authority or a licensed adviser before making decisions.