Overview of Utah Taxes
Utah has a very simple income tax system with only one rate. All taxpayers in Utah pay a flat 5% state income tax rate, regardless of filing status and income. No cities in the Beehive State have local income taxes. Of course, Utah taxpayers still have to pay federal income taxes.
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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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Utah Paycheck Calculator
Utah Paycheck Quick Facts
- Utah income tax rate: 5%
- Median household income: $65,325 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your Utah Paycheck Works
Determining your take-home pay can be complicated. That’s because every pay period your Utah employer will deduct money from your wages for a variety of reasons.
Some of this money goes to FICA taxes and federal income taxes. Social Security and Medicare taxes together make up FICA taxes, and they are treated in the same way across all states. A withholding of 6.2% of your income goes toward Social Security taxes with an additional 6.2% coming from your employer. Medicare taxes account for a smaller percentage at 1.45%, with employers again matching that amount. If you earn wages in excess of $200,000, you have to pay a 0.9% Medicare surtax. Your employer does not match the surtax.
In most cases, you’re only responsible for paying 50% of your FICA taxes on your own. In situations where you don’t have an employer to contribute the additional 50%, you may find yourself responsible for the full percentage. This is the case for self-employed people and some independent contractors.
Employers also withhold federal income tax from each of your paychecks. How much you pay in federal income tax is based on factors like your salary, your marital status, how many allowances you claim on your W-4 form and if you asked for an additional dollar withholding. It’s your employer’s job to withhold federal income tax based on the information you provide on your W-4 form.
Note that withholding calculations changed for the 2018 tax year because of President Trump's new tax plan. Employers should have applied the changes in early 2018 so you likely don’t need to do anything on your end. Still, it’s a good practice to look over your W-4 at the start of the year to ensure all the information is correct.
Keep in mind that if you have more than one job, you cannot claim the same allowance with multiple employers. You will need to split your total allowances among your employers. One option would be to claim all of your allowances with one employer and then claim none with the others.
How often you receive paychecks will also impact your paychecks. While you may not have a say in how frequently your employer pays you, just remember that your paychecks will be smaller if you receive them more frequently.
The Beehive State has a flat income tax rate. This means that whether you file taxes as an individual, the head of the household or with your spouse, you face the same percentage of tax liability. This is true for income level as well. All filers pay the flat rate of 5% regardless of income level. That’s also the only income tax you’ll pay because there are no local income taxes in Utah.
A financial advisor in Utah can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
If you are considering purchasing a property in Utah or are looking to refinance, check out our Utah mortgage guide. It covers mortgage rates and other important information for moving to the city.
How You Can Affect Your Utah Paycheck
A primary way in which you can affect your Utah paycheck is through the number of allowances you choose to claim on your W-4. The more allowances you claim, the less your employer withholds in taxes and the more of your income remains accessible to you throughout the year. This means you have the money in your possession and you could do anything from depositing it in a high-interest savings account to paying down student loan debt. The notable drawback to claiming more allowances is that you risk underpaying your taxes all year and facing a big bill from the IRS come April. If you really want to avoid owing the IRS money, you might want to opt for additional dollar withholding from each of your paychecks. This is on top of the allowances you’re claiming. For example, if you want to withhold an additional $50 from each paycheck, simply write $50 on the corresponding line of the W-4.
Claiming fewer allowances means more of your money is withheld for taxes during the year. You’ll receive smaller paychecks as a result. And while you won’t have all of your money in your bank account during the year, there’s less chance that you’ll owe money when you file your taxes. If you prefer to receive a refund, claiming fewer allowances is your best bet.
Another option that may work for you if you want to reduce your tax bite is to put more of your paycheck into pre-tax accounts. If your employer offers a 401(k) or 403(b) retirement account, you could choose to increase your contribution to it. Contributions come out of your pay before taxes do and so you’re lowering your taxable income while simultaneously saving for your retirement.
For similar tax reasons, you may also want to utilize a health savings account (HSA) or flexible spending account (FSA). The money you put into these accounts can be used for certain medical expenses like copays. Keep in mind though that only $500 of FSA funds will roll over from year to year.
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 2017 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics
