Overview of Mississippi Taxes
Mississippi has a progressive income tax system, meaning higher-earning filers will pay more in taxes. You will notice state, but no city, income taxes taken out of your paycheck. Mississippi's income tax rate is fairly low, but its sales tax is above average at 7%.
This calculator reflects the 2018 federal withholding tax changes.
Click here to learn more about how the Trump Tax Plan will affect you.
|Take Home Salary||--%||$--|
- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Mississippi Paycheck Quick Facts
How Your Mississippi Paycheck Works
FICA taxes are made up of Social Security and Medicare taxes. Your employer withholds 6.2% of your wages for Social Security and 1.45% for Medicare from your paycheck, and also matches those amounts so the total contributions are doubled. If you are self-employed, you have to pay the total 12.4% to Social Security and 2.9% to Medicare yourself. Any wages you earn in excess of $200,000, are subject to a 0.9% Medicare surtax, which is unmatched.
You will have money withheld from your paycheck because of federal income tax. How much your employer withholds will depend on your earnings and what you put on your W-4 form. The W-4 form that you give your employer indicates your marital status, the number of allowances you’re claiming and any additional tax withholding you want your employer to take from your paychecks.
Take note that withholding calculations have changed for the 2018 tax year because of the tax plan that President Trump signed into law in December 2017. The IRS released new tax withholding guidelines in January and taxpayers should have seen changes to their paychecks, to reflect the new tax plan, starting in February 2018. For the time being, taxpayers do not need to fill out a new W-4. Employers will simply use the withholdings on an employee’s current form.
Other money deducted from your paycheck depends on whether you opt to take advantage of benefits offered by your employer. If you have health or life insurance plans through your company or if you pay into retirement accounts like a 401(k), 403(b) or Roth IRA, for example, the money for these will come from your wages. Same applies if you choose to make contributions to a Health Savings Account (HSA) or Flexible Spending Account (FSA).
Mississippi Median Household Income
|Year||Median Household Income|
The Magnolia State’s tax system is progressive so taxpayers who earn more can expect to pay higher marginal rates on their income. You will be taxed 3% on the first $5,000 you earn in Mississippi; 4% up to $10,000 and 5% on income over that. The tax brackets are the same for everyone regardless of filing status.
Mississippi’s income tax rate may be below the national average, but its sales tax, which is 7%, is higher than average. This doesn’t directly affect your paycheck but it does your affect your budget, so keep it in mind.
No cities in Mississippi charge local income taxes.
Income Tax Brackets
|Mississippi Taxable Income||Rate|
|$0 - $5,000||3.00%|
|$5,000 - $10,000||4.00%|
How You Can Affect Your Mississippi Paycheck
If you want to adjust the size of your Mississippi paycheck, you should start by looking at your W-4 form. Remember your W-4 is what employers use to determine how much should be withheld in taxes from each of your paychecks. So whenever you start a new job or if you want to make changes, you have to fill out a new form.
If you are concerned that you are going to be facing a big tax bill come April, you can elect to have your employer withhold a dollar amount from each of your paychecks. Simply decide how much you want withheld, for example $20 per paycheck, and write that amount down on a new W-4. Another option if you always have to pay a lump sum of taxes during tax season, is to lower the allowances that you are claiming. It may seem strange to choose to get smaller checks throughout the year but you would owe that money in taxes anyway. The only difference is you are paying it out more consistently over time instead of with one massive annual bill.
One way to save for retirement while also reducing your taxable income is by putting more money into pre-tax retirement accounts like a 401(k) or 403(b). The money that you contribute to these retirement accounts is taken out of your pay before taxes are applied, so it effectively lowers how much of your wages are subject to taxes. In Mississippi, the money in these retirement accounts actually goes further than it would in other states. Typically, 401(k) funds are not taxed until you withdraw money from the plan. But since Mississippi does not require retirees to pay state income tax on qualified income, the money in your 401(k) is never subject to state-level taxes.
If you are thinking about moving to Mississippi and will be looking to purchase a home, our Mississippi mortgage guide can help ease some of the stress that comes with homebuying. It puts all the important information about rates and getting a mortgage in the Magnolia State onto one convenient page.
Mississippi Top Income Tax Rate
|Year||Top Income Tax Rate|
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that shows the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2016 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics