How Minnesota Taxes Your Paycheck
Minnesota's income tax is genuinely progressive, with a top rate of 9.85% — the third-highest state top rate in the country (behind only California's 13.3% and Hawaii's 11%). Unlike states where the top rate is mostly theatrical because it kicks in above $1M, Minnesota's 9.85% bracket starts around $200,000 single, hitting many dual-income households.
The bracket math is real. Minnesota's four brackets are 5.35%, 6.80%, 7.85%, and 9.85%. The 7.85% rate kicks in around $100,000 single — meaning middle-income earners pay a meaningful state rate even before the top bracket. A single filer earning $80,000 in 2026 pays about $3,951 in state tax — roughly 4.9% of gross. At $150,000, the effective rate climbs above 6%.
Federal-conforming standard deduction. Minnesota's standard deduction tracks federal, indexed annually. Pre-tax 401(k), HSA, and Section 125 health premiums reduce MN taxable wages. The state's high rates are partially offset by the same deductions a federal taxpayer is already taking.
No local income tax. Minneapolis, St. Paul, Rochester, Duluth — none levy a city wage tax. The state tax line on your paystub is the entire wage-tax bill. This is unusual for a high-tax state; most layer a city tax on top (NY, OH, MD, PA).
Sales tax is moderate, with broad exemptions. State sales tax is 6.875%, with most of the Twin Cities metro adding 0.5%–1% local. The combined Minneapolis rate is around 8.875%. Groceries, prescription drugs, and clothing are exempt — a meaningfully broader exemption set than most states.
Property tax is moderate. Minnesota's effective property tax rate (about 1.05%) is roughly at the national average. Homestead refunds and renter's credits provide targeted relief for lower-income households.
Industry and economy. Minnesota's economy is more diverse than its population size suggests: medical devices (Medtronic, Boston Scientific) and healthcare in Rochester (Mayo Clinic), agriculture and food processing (Cargill, General Mills, Hormel), retail (Target, Best Buy), and a deep banking presence (US Bancorp regional, Wells Fargo regional). The Twin Cities anchor a Fortune 500 density that's high for the state's population.
Minnesota is a high-tax state, but the structure is unusually clean — no city layer, no SDI, broad sales-tax exemptions, full federal conformity. For workers under $100K single, the effective burden is moderate. For higher earners, the 7.85% and 9.85% brackets are the math that defines living in Minnesota.
Top Cities in Minnesota
The largest population centers in Minnesota:
- Minneapolis — 425,000 residents
- Saint Paul — 304,000 residents
- Rochester — 122,000 residents
- Duluth — 86,000 residents
How Minnesota Compares to Neighboring States
Single-filer take-home on a $75,000 annual salary in 2026, federal + state income tax + FICA only:
| State | Take-Home | vs. Minnesota |
|---|---|---|
| Minnesota (here) | $57,981 | — |
| Wisconsin | $58,770 | +$788 |
| Iowa | $58,743 | +$761 |
| South Dakota | $61,593 | +$3,611 |
| North Dakota | $61,368 | +$3,386 |
Take-home reflects single filer, no pre-tax deductions; SDI/PFML and local taxes excluded for an apples-to-apples comparison.
Frequently Asked Questions
What's the Minnesota state income tax rate?
Minnesota has progressive income tax brackets ranging from 5.35% to 9.85%. Most middle-income earners hit the middle brackets; the top rate applies only above $198,630.
How much is taken out of my paycheck in Minnesota?
For a single filer earning $75,000 in Minnesota (2026), expect roughly $7,670 in federal income tax, $5,738 in FICA, and $3,611 in Minnesota state tax — leaving about $57,981 take-home (22.7% effective tax rate). SDI/PFML and local taxes (if any) come out of that as well.
Is the Minnesota median household income enough to live comfortably?
The 2023 ACS reported a Minnesota median household income of about $87,100. Whether that's "comfortable" depends heavily on city — Minneapolis cost of living can differ substantially from rural areas. Use the calculator above to model your specific salary and deductions.
How does this Minnesota paycheck calculator work?
We calculate your annualized gross pay based on the pay frequency you select, then apply the 2025 or 2026 IRS percentage method for federal income tax, the Minnesota state tax schedule (if any), Social Security, and Medicare. Pre-tax deductions like 401(k) and Section 125 health premiums reduce your taxable base before withholding is computed. You can switch between salary and hourly modes; hourly mode applies time-and-a-half to hours over 40/week prorated by pay period.