Michigan charges a flat 4.25%, and on an $85,000 salary that comes to $3,362. A single filer takes home $65,266.
If they live in one of 24 specific cities, they pay more. If they live anywhere else in Michigan — and most Michiganders do — that state figure is the whole answer.
Michigan's local income tax is unusual in being both narrow and named. Ohio has hundreds of taxing municipalities and Maryland taxes every county without exception. Michigan has a closed list of two dozen cities, set by statute, with rate ceilings written into law.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Michigan's rate, exemption and city-tax structure come from this site's own sourced 50-state dataset, which cites the Uniform City Income Tax Ordinance and the relevant sections of the Michigan Compiled Laws. Every dollar figure is computed by the same engine the site's calculators use, on a single filer with one exemption, no dependents and no pre-tax deferrals unless stated. City income taxes are named here but never included in any total — see section 3.
1. A flat rate with an exemption instead of a deduction
Michigan's income tax is 4.25%, applied to income after exemptions. There is no standard deduction.
What Michigan gives instead is a personal exemption of $5,900 per person, deducted from income. A married couple gets $11,800; each dependent adds another $5,900.
| Federal | Michigan | |
|---|---|---|
| Salary | $85,000 | $85,000 |
| Standard deduction | −$16,100 | — |
| Personal exemption | — | −$5,900 |
| Taxable income | $68,900 | $79,100 |
That $5,900 is a genuine shelter and it is smaller than the federal deduction, so Michigan taxes a larger base — which is why 4.25% produces $3,362 rather than the $2,929 that 4.25% of $68,900 would be.
The exemption structure favours families
Because the exemption is per person rather than a fixed household amount, it scales with family size in a way a standard deduction does not. A family of four shelters $23,600 of income before the 4.25% applies — meaningfully more than a single filer's $5,900, and more than many states allow.
This is a real structural difference from a state like Pennsylvania, which shelters nothing regardless of household size, and it means Michigan's flat rate lands considerably more gently on larger households than the headline number suggests.
2. What it costs across incomes
| Salary | Michigan tax | Marginal rate | Take-home |
|---|---|---|---|
| $30,000 | $1,024 | 4.25% | $25,261 |
| $45,000 | $1,662 | 4.25% | $36,676 |
| $60,000 | $2,299 | 4.25% | $48,091 |
| $85,000 | $3,362 | 4.25% | $65,266 |
| $120,000 | $4,849 | 4.25% | $88,401 |
| $175,000 | $7,187 | 4.25% | $123,692 |
The marginal rate column does not move. That is what a flat tax means, and it has one useful consequence: there is no bracket confusion in Michigan. A raise is taxed at exactly the rate your first taxable dollar was.
A joint filer on $85,000 pays $3,111 — $251 less than a single filer, entirely from the doubled exemption rather than from any bracket widening, because there are no brackets to widen.
Run your own salary against Michigan's flat rate3. The twenty-four cities
Exactly 24 Michigan cities levy an income tax:
Albion · Battle Creek · Benton Harbor · Big Rapids · Detroit · East Lansing · Flint · Grand Rapids · Grayling · Hamtramck · Highland Park · Hudson · Ionia · Jackson · Lansing · Lapeer · Muskegon · Muskegon Heights · Pontiac · Port Huron · Portland · Saginaw · Springfield · Walker
Every other municipality in Michigan levies none. If your city is not on that list, the state figure is your complete income tax answer — which distinguishes Michigan sharply from Ohio, where most municipalities tax, and from Maryland, where every county does.
Detroit is administered by the Department of Treasury. The other 23 administer their own.
The rate structure is set by statute
The default under the Uniform City Income Tax Ordinance (MCL 141.611) is 1% for residents and 0.5% for nonresidents.
And there is a rule worth knowing that applies everywhere: the nonresident rate is always capped at half the resident rate. Not approximately half — exactly half, as a statutory ceiling.
The named exceptions rest on separate statutory ceilings:
| City | Resident | Nonresident | Basis |
|---|---|---|---|
| Detroit | 2.4% | 1.2% | MCL 141.503(2)(d) |
| Grand Rapids | 1.5% | 0.75% | MCL 141.503c |
| Saginaw | 1.5% | 0.75% | MCL 141.503c |
| Highland Park | up to 2% | 1% | MCL 141.503a(2), voter-approved |
| All others on the list | 1% | 0.5% | MCL 141.611 default |
Grand Rapids and Saginaw's higher ceiling exists because they were levying before March 30, 1989 — a grandfather provision, not a general permission.
Detroit's 2.4% is scheduled to drop to 2.2%/1.1% once lighting-authority bonds are retired, which is an unusual piece of specificity to find in a tax rate and worth knowing if you are planning around it.
4. What Detroit's rate actually costs
At 2.4% on roughly $79,100 of Michigan taxable income, a Detroit resident on $85,000 pays approximately $1,900 in city income tax.
| Amount on $85,000 | |
|---|---|
| Michigan state income tax | $3,362 |
| Detroit city tax at 2.4% | ≈$1,900 |
| Combined | ≈$5,262 |
That raises the income tax burden by more than half, and it moves Michigan from a mid-table state to something closer to the upper third for Detroit residents specifically.
A nonresident working in Detroit pays 1.2% — roughly $950 on the same figure. That is the practical value of the half-rate cap, and it is why the resident-versus-nonresident distinction matters more in Michigan than the raw rates suggest.
In a 1% city — which is 20 of the 24 — the resident figure is around $790, and a nonresident pays about $395. Meaningful, and a fraction of Detroit's.
5. The full picture on $85,000
| Outside the 24 cities | Detroit resident | |
|---|---|---|
| Gross salary | $85,000 | $85,000 |
| Federal income tax | −$9,870 | −$9,870 |
| Social Security | −$5,270 | −$5,270 |
| Medicare | −$1,233 | −$1,233 |
| Michigan state tax | −$3,362 | −$3,362 |
| Detroit city tax | — | ≈−$1,900 |
| Take-home | $65,266 | ≈$63,366 |
The federal share is $16,373 in both columns — nearly five times what Michigan takes, and still more than three times Detroit's combined state and city figure.
6. Where Michigan ranks
At $85,000, on the state figure alone:
| State | Tax on $85,000 |
|---|---|
| Oregon | $6,864 |
| New York | $3,993 |
| California | $3,660 |
| Maryland (state only) | $3,672 |
| Michigan | $3,362 |
| Kentucky | $2,857 |
| Pennsylvania | $2,610 |
| Indiana | $2,478 |
| Ohio | $1,621 |
Michigan sits mid-table, and above two of its Great Lakes neighbours on the state figure — Ohio at $1,621 and Indiana at $2,478 — while Wisconsin at $3,537 costs more.
But every one of those neighbours except Wisconsin also has a local layer, and Ohio's and Indiana's are near-universal while Michigan's covers 24 cities. Comparing state figures across this region is comparing four different fractions of four different answers.
The honest regional comparison for someone outside Michigan's 24 cities: Michigan's $3,362 is a complete answer, while Ohio's $1,621 usually is not.
7. Reducing what Michigan takes
Pre-tax deferrals reduce Michigan tax. Michigan starts from federal adjusted gross income, so a traditional 401(k) contribution lowers both. A $10,000 deferral saves $425 in Michigan tax at 4.25%, on top of the federal saving.
The city treatment is different and worth checking. Michigan city income taxes generally follow their own rules on what is taxable, and a deferral that reduces your state tax may not reduce your city tax in the same way. If you live in one of the 24, confirm with your city rather than assuming the state treatment carries.
HSA contributions add the FICA saving — 7.65% that a 401(k) deferral does not touch — through payroll under a cafeteria plan.
Claim every exemption you are entitled to. At $5,900 per person and 4.25%, each exemption is worth about $251 a year in Michigan tax. For a family of four that is roughly $1,003, and exemptions are claimed rather than automatic.
8. Retirement in Michigan
Michigan does not tax Social Security benefits.
Its treatment of other retirement income has been changing, and this is one of the areas where a general summary is genuinely inadequate: Michigan has been phasing in more generous treatment of pension and retirement account income, with the amount available depending on your birth year and the type of income. Different cohorts face materially different rules in the same tax year.
If you are approaching retirement in Michigan, this is worth checking against the Department of Treasury's current guidance for your specific birth year rather than relying on any article — including this one — because the answer genuinely differs between people a few years apart in age.
The city income taxes generally reach retirement income only to the extent it is taxable, so the state treatment largely drives the local one.
9. If you are weighing one of the 24 cities
The list is short and public, which makes this an unusually tractable decision.
Detroit is the one with real money attached. At 2.4% resident, roughly $1,900 a year on $85,000. Against a suburb outside the city limits levying nothing, that is about $158 a month.
A 1% city costs about $790 at that salary — around $66 a month. Real, and small enough that it should rarely decide where you live.
Working in a taxing city while living outside it costs half the resident rate, by statute. A nonresident in Detroit pays 1.2%, roughly $950. So a suburban resident with a Detroit job pays half what a Detroit resident with the same job pays — which is the arithmetic behind a great deal of metro Detroit's residential pattern.
Check both addresses. As in Ohio, Michigan city income tax reaches nonresidents who work in the city. Moving your job into a taxing city changes your bill even if you do not move house.
10. Moving to or from Michigan
Michigan's flat rate makes comparison unusually easy. There are no brackets to model and no phase-outs to track — your Michigan tax is 4.25% of income after exemptions, at every income level.
The 24-city list is the only local variable, and it is a closed list. Unlike Ohio, where you must look up a specific municipality among hundreds, in Michigan you can simply check whether your city is one of the two dozen.
Reciprocity exists with several neighbouring states covering state income tax for commuters. As everywhere, it does not touch city taxes — a reciprocal agreement will not exempt you from Detroit's nonresident rate.
Property tax is a separate and significant question in Michigan, with a homestead exemption for principal residences and assessment rules that reward long tenure.
11. The half-rate cap, and what it does to metro Detroit
The statutory rule that a nonresident rate is always exactly half the resident rate is unusual, and its effects are larger than a tax technicality normally produces.
Consider three people, all earning $85,000, all working in downtown Detroit:
| City income tax | |
|---|---|
| Lives in Detroit | ≈$1,898 (2.4%) |
| Lives in a suburb outside the 24 | ≈$949 (1.2% nonresident) |
| Lives in a 1% city, works there | ≈$791 (1% resident) |
The Detroit resident pays twice what their colleague at the next desk pays, for the same job, because of where they sleep. That is roughly $949 a year, or $79 a month.
This is a deliberate policy choice with a visible geographic consequence. A tax structure that charges residents double what commuters pay creates a standing financial reason to work in the city and live outside it — and metro Detroit's residential pattern reflects that, among many other and larger historical forces.
It also means the city collects from a much wider population than it houses. A nonresident earning in Detroit contributes without voting there, which is the standard trade-off of a work-location income tax and is why the half-rate cap exists at all: it limits how much a city can extract from people with no representation in it.
For an individual decision the number is modest — $79 a month is not usually what decides where someone lives. It belongs in the comparison rather than driving it.
12. Why a flat tax is not automatically simple
Michigan is a useful case for a general point: a single rate does not mean an easy calculation.
The exemption has to be counted correctly. At $5,900 per person, a household's shelter depends on how many people are on the return. Miss a dependent and you overpay by about $251. The exemption is claimed rather than automatic.
Additional exemptions exist for specific circumstances, including for certain disabilities and for qualified veterans, and they are easy to overlook precisely because a flat tax feels like it should have no complications.
The city layer is genuinely separate. A Detroit or Grand Rapids filer completes a city return with its own rules on what is taxable, its own treatment of deferrals, and its own resident-versus-nonresident apportionment if they moved or changed jobs mid-year.
Part-year residency splits everything. Move into or out of a taxing city during the year and both the city portion and the resident-versus-nonresident question apportion, which is more arithmetic than a flat state rate suggests.
The general lesson, which applies well beyond Michigan: flatness describes the rate, not the return. Pennsylvania's flat 3.07% with no deduction is genuinely the simplest calculation in the country. Michigan's flat 4.25% with per-person exemptions and a 24-city local layer is not, and the rate alone will not tell you that.
Frequently asked questions
What is Michigan's income tax rate? A flat 4.25% on income after exemptions. There is no standard deduction; Michigan allows a personal exemption of $5,900 per person instead, so a family of four shelters $23,600 before the rate applies.
How much is take-home pay on $85,000 in Michigan? $65,266 for a single filer with one exemption, after $9,870 federal income tax, $6,503 FICA and $3,362 Michigan tax. If you live in one of 24 taxing cities, the city tax comes out of that figure.
Which Michigan cities have an income tax? Twenty-four: Albion, Battle Creek, Benton Harbor, Big Rapids, Detroit, East Lansing, Flint, Grand Rapids, Grayling, Hamtramck, Highland Park, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Saginaw, Springfield and Walker. Every other municipality levies none.
How much is Detroit's city income tax? 2.4% for residents and 1.2% for nonresidents, under a separate statutory ceiling in MCL 141.503(2)(d). It is scheduled to drop to 2.2%/1.1% once lighting-authority bonds are retired. On $85,000 the resident figure is roughly $1,900.
Why do Grand Rapids and Saginaw charge more than 1%? Both were levying before March 30, 1989, which a grandfather provision in MCL 141.503c permits — allowing 1.5% resident and 0.75% nonresident rather than the 1%/0.5% default.
Do I pay city tax if I work in a taxing city but live elsewhere? Yes, at the nonresident rate, which is always exactly half the resident rate by statute. A nonresident in Detroit pays 1.2%, roughly $950 on $85,000.
Does Michigan tax retirement income? It does not tax Social Security. Its treatment of pension and retirement account income has been changing and depends on your birth year and income type, so it is worth checking current Treasury guidance for your specific cohort rather than relying on a general summary.
Do married couples pay less in Michigan? Somewhat — $3,111 against $3,362 on $85,000, a $251 difference. It comes entirely from the doubled $5,900 exemption, since a flat rate has no brackets to widen.
Is Michigan cheaper than Ohio or Indiana? On the state figure, no — Michigan's $3,362 is above Ohio's $1,621 and Indiana's $2,478. But both of those states have near-universal local income taxes while Michigan's covers 24 named cities, so for someone outside those cities Michigan's number is complete and Ohio's usually is not.
What is a Michigan personal exemption worth? About $251 a year each, being $5,900 sheltered at the 4.25% rate. A family of four claiming all four exemptions saves roughly $1,003 against claiming none, which is why they are worth checking rather than assuming payroll has them right.
What to do next
Michigan's flat rate makes the state figure simple. The only question worth researching is whether your city is one of the 24, and if so, whether you are a resident or a nonresident there.
- Michigan take-home pay calculator — every deduction separated, with the city tax named rather than guessed.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in Ohio — the neighbouring state where nearly every municipality taxes.
- Michigan rent affordability — what the take-home actually supports.
- 50/30/20 budget calculator — built on take-home rather than salary.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer with one personal exemption, no dependents and no pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Michigan figures from this site's sourced 50-state dataset, citing the Uniform City Income Tax Ordinance and the relevant sections of the Michigan Compiled Laws. City income taxes are named but never included in any total; city figures quoted here are illustrative applications of the published rate rather than a full city return. Michigan's retirement income treatment varies by birth year and is summarised rather than computed. This is general education and not tax advice; for your own situation consult a licensed tax professional.