Skip to content
PaycheckDesk

Michigan · tax year 2026

Does Michigan tax tips and overtime?

Both deductions cut your state tax too.

Michigan charges a flat 4.25% on federal AGI less a $5,900 exemption per filer, and under H.B. 4961 it follows BOTH federal deductions for 2026-2028 — one of the few states that does. If you work in Detroit, the city adds its own tax on top: 2.4% for residents, 1.2% for non-residents, with a $600 exemption. That city tax is not included here.

What it means on a real paycheck

Take a single filer earning $50,000 a year, $8,000 of it in tips. Against the same person with no tips to declare, the federal deduction is worth $960.

In Michigan it is worth $340 more, because the state follows the federal deduction. Together that is $1,300.

How Michigan works out the tax

Michigan charges a flat 4.25%, after an exemption of $5,900 a person. It begins from your federal adjusted gross income and applies its own reliefs from there.

Your own numbers

Your gross pay before any taxes or deductions.

Married filing separately cannot claim these deductions at all, so it is not offered here.

Traditional, pre-tax. Lowers income tax but not Social Security or Medicare.

Pre-tax cafeteria-plan premiums. These lower income tax and FICA.

Take-home pay per paycheck (26 per year)

$1,908

$49,613 a year after taxes and deductions.

Michigan charges a flat 4.25% on federal AGI less a $5,900 exemption per filer, and under H.B. 4961 it follows BOTH federal deductions for 2026-2028 — one of the few states that does. If you work in Detroit, the city adds its own tax on top: 2.4% for residents, 1.2% for non-residents, with a $600 exemption. That city tax is not included here. See what that costs you →

Where the money goes each year

Gross salary$62,000
Federal income taxTop rate applied: 12%−$5,260
Social Security−$3,844
Medicare−$899
State income tax (MI)Flat 4.25% on $56,100 of state taxable income−$2,384
Take-home pay$49,613

Per paycheck

Gross$2,385
Taxes withheld−$476
Net$1,908

Estimate for tax year 2026 assuming the standard deduction, no dependents or credits, and even pay across the year. Your employer withholds using your Form W-4, so an individual paycheck can differ. Effective total tax rate: 19.98%. Not tax advice.

Where these figures come from

Michigan’s rates and reliefs here were taken from Michigan’s own publication and last checked on 2026-08-01. A state appears in this calculator only once its figures have been read off that state’s own paperwork and covered by tests — never estimated, and never copied from another site.

Figures on this page are for tax year 2026 and were last checked against the primary sources on 2026-07-31. See our sources. This is an estimate, not tax advice.

← All states