How Much Taxes Are Taken Out in Michigan?
Understand the factors that determine your Michigan take-home pay. See how federal rules, state exemptions, and your location combine to affect your final paycheck.
The amount on your Michigan paycheck is less than your total earnings because of required tax withholdings. These deductions are based on a combination of federal, state, and sometimes local tax laws, and are withheld by your employer. This process reduces your gross pay to your final take-home amount.
Federal Taxes Withheld From Your Paycheck
Every employer in the United States must withhold federal taxes from an employee’s paycheck. These taxes include federal income tax and Federal Insurance Contributions Act (FICA) taxes. Federal income tax withholding is based on information from your Form W-4, such as filing status and dependents.
FICA taxes are composed of Social Security and Medicare taxes. The Social Security tax is 6.2% and the Medicare tax is 1.45%. The Social Security tax has a wage base limit of $176,100 for 2025. In contrast, there is no wage base limit for the Medicare tax.
Michigan State Income Tax Withholding
Your paycheck will also have deductions for Michigan’s 4.25% flat income tax. You can reduce your income subject to this tax through personal and dependent exemptions.
For 2025, each exemption is valued at $5,800 and is subtracted from your annual wages before the tax is calculated. To set your state withholding, you must complete Form MI-W4 to declare your exemptions.
Michigan Local Income Tax Withholding
Some employees in Michigan are also subject to local income taxes. If you live or work in one of these municipalities, your employer must withhold city income tax. The tax rate depends on your status as a resident or non-resident, with the non-resident rate being half of the resident rate.
The following table lists the 24 Michigan cities that impose a local income tax, along with their respective rates for both residents and non-residents.
| City | Resident Rate | Non-Resident Rate |
| :— | :— | :— |
| Albion | 1.0% | 0.5% |
| Battle Creek | 1.0% | 0.5% |
| Benton Harbor | 1.0% | 0.5% |
| Big Rapids | 1.0% | 0.5% |
| Detroit | 2.4% | 1.2% |
| East Lansing | 1.0% | 0.5% |
| Flint | 1.0% | 0.5% |
| Grand Rapids | 1.5% | 0.75% |
| Grayling | 1.0% | 0.5% |
| Hamtramck | 1.0% | 0.5% |
| Highland Park | 2.0% | 1.0% |
| Hudson | 1.0% | 0.5% |
| Ionia | 1.0% | 0.5% |
| Jackson | 1.0% | 0.5% |
| Lansing | 1.0% | 0.5% |
| Lapeer | 1.0% | 0.5% |
| Muskegon | 1.0% | 0.5% |
| Muskegon Heights | 1.0% | 0.5% |
| Pontiac | 1.0% | 0.5% |
| Port Huron | 1.0% | 0.5% |
| Portland | 1.0% | 0.5% |
| Saginaw | 1.5% | 0.75% |
| Springfield | 1.0% | 0.5% |
| Walker | 1.0% | 0.5% |
Calculating Your Total Paycheck Withholding
An employee earning $2,000 gross bi-weekly, filing as single, and claiming one state exemption will have FICA taxes subtracted first. Social Security withholding is $124 ($2,000 x 6.2%), and Medicare is $29 ($2,000 x 1.45%). Federal income tax is then calculated using IRS tables and the employee’s Form W-4.
Next, Michigan state income tax is calculated. The annual $5,800 exemption is divided by 26 bi-weekly pay periods, for a $223.08 exemption per paycheck. Taxable state wages are $1,776.92 ($2,000 – $223.08), making the state withholding $75.52 ($1,776.92 x 4.25%).
If this employee also lives and works in Grand Rapids, they would have local income tax withheld. The withholding would be $30 ($2,000 x 1.5%). After subtracting all taxes, the remainder is the employee’s net pay.