9 States With No Income Tax — And What It Means for Your Paycheck

5 min read · April 2025

Where you live matters more than most people realize when it comes to take-home pay. State income tax can take anywhere from 2.5% to nearly 10% of your earnings — or absolutely nothing at all. Nine states currently have no state income tax on wages, and if you live in one of them, you're keeping significantly more of every paycheck.

The 9 States With No Income Tax

How Much Can You Actually Save?

Let's put real numbers to it. If you earn $65,000 per year and live in California, you'd pay roughly $4,500+ in state income tax annually. Move to Texas on the same salary and you pay $0 in state income tax — keeping that entire amount.

On a $65,000 salary, that's roughly $173 more per paycheck (bi-weekly) just from living in a no-tax state.

The Trade-Off You Should Know

States have to fund themselves somehow. No-income-tax states often make up the difference through higher property taxes, sales taxes, or fees. Texas, for example, has relatively high property taxes. Washington has a sales tax. It's important to look at the full picture of your cost of living when comparing states — not just income tax.

Highest Income Tax States to Compare

• California: up to 13.3%
• Hawaii: up to 11%
• New Jersey: up to 10.75%
• Oregon: up to 9.9%
• Minnesota: up to 9.85%

The gap between living in California vs. Texas on a high income can be tens of thousands of dollars per year — which is why so many people and businesses have relocated in recent years.