US Paycheck Deductions by State: FICA, State Income Tax, and SDI Breakdown
A comparative analysis of take-home pay across US states: comparing zero-tax states like Texas and Florida against high-tax states like California and New York.
David K.
Financial Systems Analyst
With the permanent normalization of remote engineering roles across the United States, software developers frequently evaluate relocations based on tax differentials. A $150,000 salary yields dramatically different monthly bank deposits depending on whether you reside in Austin, Miami, Seattle, San Francisco, or New York City.
Federal Statutory Deductions: The Mandatory Baseline
Regardless of which state you live in, all W-2 employees pay identical federal baseline taxes:
- Social Security (OASDI): 6.2% on wages up to the annual statutory wage cap.
- Medicare: 1.45% on all earnings, plus an additional 0.9% surtax on earnings exceeding $200,000 for single filers.
- Federal Income Tax (FIT): Progressive marginal brackets ranging from 10% to 37% after standard deductions.
The State-Level Divergence
The dramatic difference in net take-home pay stems from state income taxes and state disability insurance (SDI):
- Zero Income Tax States: Texas, Florida, Washington, Nevada, Tennessee, Wyoming, and Alaska levy 0% state income tax on W-2 earnings.
- Progressive High-Tax States: California (up to 13.3% top marginal rate plus 1.1% SDI), New York (state plus municipal NYC resident taxes reaching ~14.8%), and New Jersey.
Frequently Asked Questions
Can remote workers live in a zero-tax state and avoid income tax if their employer is in California?
Generally, W-2 wages are taxed where physical work is performed. If you physically perform work in Texas, you are subject to Texas state tax rules, not California rules.
How do pre-tax deductions (401k, HSA, FSA) lower paycheck taxes?
Contributing to traditional 401(k) and HSA accounts reduces your gross adjusted income before federal and state taxes are calculated, lowering your effective tax bracket.
Conclusion
Accurate paycheck modeling clarifies your true disposable income after state and federal deductions. Compute your take-home pay with our client-side US Paycheck Calculator and compare deductions on Luminus Finance.
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