Overview of Nebraska Taxes
The Cornhusker State has a progressive income tax system with four brackets that vary according to income level and filing status. No cities in Nebraska have local income taxes.
This calculator reflects the 2018 federal withholding tax changes.
Click here to learn more about how the Trump Tax Plan will affect you.
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- 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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 | Nebraska Paycheck Quick Facts
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How Your Nebraska Paycheck Works
If you have ever started a new job and been surprised that your paychecks are lower than you expected, it’s likely because you haven’t fully factored in taxes. It’s not easy to calculate what your take-home pay will be even if you know what your annual salary is. That’s because your actual paychecks are not simply your salary divided by your pay periods. There are certain deductions, like federal income and FICA taxes, taken from your paycheck no matter which state you call home. And then depending on where you live, you may also see state income taxes deducted from your wages.
The first deduction that all taxpayers face is FICA taxes. Your employer will withhold 1.45% in Medicare tax and 6.2% in Social Security. If you make more than $200,000, any wages in excess of that amount will be subject to an additional 0.9% Medicare surtax. Your employer matches your Medicare and Social Security taxes, so the total contributions are double that amount. Keep in mind if you’re self-employed, you won’t get this perk and so you will be responsible for paying the full amount yourself.
You can also expect to have federal income taxes withheld from your paycheck. The IRS collects this and counts it toward your annual income taxes. How much you pay in federal taxes depends on factors like whether you are single or married, how much you earn, how many allowances you are eligible for/how many you claim and whether you elect to have additional tax withheld from your paycheck. All this information is reported on your W-4 form.
Withholding calculations for federal income tax have changed for the 2018 tax year. The IRS released new guidelines in January to reflect changes that came with President Trump’s new tax plan. Taxpayers should have seen changes to their paychecks, to reflect the new tax plan, starting in February 2018. For the time being, you do not need to fill out a new W-4. Your employer will use the withholdings on your current form.
Nebraska Median Household Income
| Year | Median Household Income |
| 2016 | $44,811 |
| 2015 | $43,740 |
| 2014 | $54,384 |
| 2013 | $52,997 |
| 2014 | $52,686 |
| 2013 | $51,440 |
| 2012 | $50,723 |
| 2011 | $50,296 |
| 2010 | $48,408 |
| 2009 | $47,357 |
| 2008 | $49,693 |
Nebraska’s state income tax system is similar to the federal system. It’s a progressive system which means that taxpayers who earn more are taxed more. There are four tax brackets in Nevada, and they vary on income level and filing status. The lowest tax rate is 2.46%, which is on taxable income up to $3,060 (for single filers and married people filing separately). The highest rate in Nebraska is 6.84% on taxable income over $29,590 (again for single filers and married filing separately). The rates are the same for married taxpayers who file jointly and heads of households but the income brackets are different.
There are no local income taxes in Nebraska.
If you are looking to purchase a property or refinance a home in the Cornhusker State, get important information about rates and details about each county on our Nebraska mortgage guide.
How You Can Affect Your Nebraska Paycheck
If you want a bigger paycheck in Nebraska, you can start by asking for a raise or working more hours/additional shifts if you are eligible for overtime.
If it seems like your paychecks are small and you always get a big return during tax season, you could be paying too much in taxes all year. In that case you may want to make some adjustments to your W-4 form to correct that. It might seem like a good thing to get a big check in April but if you had access to that money throughout the year, you could have chosen to invest it, to put it in a savings account where it can build interest or simply to spend it. Overpaying your taxes all year is like giving the IRS an interest-free loan.
One reason you could be paying too much in taxes is that you might not be claiming enough allowances. You’re eligible for allowances based on factors like whether you are married and whether you have dependents. The more allowances you claim, the less taxes you pay and the bigger your paychecks are. However, you don’t want to claim allowances that you don’t actually qualify for because if you do, then you run the risk of having too little taken out all year and being surprised with a big bill come tax time.
You can also choose to shelter more of your money from taxes in retirement accounts like a 401(k) or 403(b), or a Health Savings Account or Flexible Spending Account. Putting more funds into these kinds of accounts mean that your paychecks will be smaller but since they are pre-tax contributions, you are actually saving money.
Nebraska Top Income Tax Rate
| Year | Top Income Tax Rate |
| 2017 | 6.84% |
| 2016 | 6.84% |
| 2015 | 6.84% |
| 2014 | 6.84% |
| 2013 | 6.84% |
| 2012 | 6.84% |
| 2011 | 6.84% |
| 2010 | 6.84% |
| 2009 | 6.84% |
| 2008 | 6.84% |
| 2007 | 6.84% |
| 2006 | 6.84% |
| 2005 | 6.84% |
| 2004 | 6.84% |
| 2003 | 6.68% |
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
