North Dakota Paycheck Calculator & Income Tax Rates (2026)

North Dakota applies 3 rates to taxable income — that is, income after the state standard deduction or exemption. Only the slice of income inside each band is taxed at that band's rate.

North Dakota's effective state rate climbs with income as more of your salary lands in higher bands. The last column shows the state rate on your next dollar at each level.

North Dakota's joint brackets widen the bands for couples, so the same household income is taxed more lightly. On $100,000 a joint return keeps $84,710 versus $78,434 for a single filer.

North Dakota has the lowest income tax of any state that taxes wages at all. Since tax year 2023, under HB 1158, the schedule is three brackets: 0% on the first slice of taxable income, 1.95% on the middle and 2.5% at the top, replacing a five-bracket schedule that ran from 1.1% to 2.9%. The zero bracket is wide enough that a typical two-earner household with children owes nothing, and the 2.5% rate reaches only the top few percent of filers. Nothing changes for 2026 beyond inflation indexing of the thresholds; a 2025 push to eliminate the tax outright stalled, and the legislature spent its oil-fueled surplus on property tax relief instead. North Dakota starts from federal taxable income, so the federal standard deduction is built in, and it excludes 40% of net long-term capital gains from state tax, giving investors an effective top rate of 1.5%.

North Dakota starts from federal taxable income, so the federal standard deduction ($16,100 single, $32,200 joint for 2026) or federal itemized deductions apply automatically. State adjustments are few: the 40% long-term capital gains exclusion, a marriage penalty credit offsetting joint brackets that are less than double the single ones, a credit for taxes paid to other states, and an exemption for active-duty military pay. The Primary Residence Credit is claimed through the tax commissioner, not on the return.

No North Dakota city, county or school district levies an income or wage tax. Fargo, Bismarck and Grand Forks rely on local sales taxes and property taxes, and the state has reciprocity with Minnesota and Montana, so residents commuting to Moorhead or working across the Montana line pay only North Dakota tax on their wages.

The state sales tax is 5%, and cities and counties add up to 3%: Fargo charges 7.5%, Grand Forks 7.25%, Bismarck 7%, and the statewide average is just under 7%. Groceries and prescription drugs are exempt; clothing is taxed. The larger cities also layer lodging, restaurant and bar taxes on top of the sales tax.

Effective property tax rates average around 1% of market value, with homes taxed on 4.5% of true value. HB 1176, the 2025 session's record relief package, raised the Primary Residence Credit from $500 to $1,600 a year, funded from Legacy Fund oil earnings, and capped local levy growth at 3% a year. Homeowners 65 and older or disabled with income under $70,000 can also claim the homestead credit, which can wipe out the taxable value of a modest home.

Social Security has been fully exempt since tax year 2021, and military retirement pay since 2019. Pensions, 401(k) and IRA withdrawals are taxed, but at rates that hardly register: a retired couple drawing $100,000 a year from a 401(k) has under $70,000 of taxable income after the federal standard deduction and lands entirely in the zero bracket, owing nothing. There is no separate pension exclusion because the zero bracket does the job. Railroad Retirement benefits are exempt under federal law, and 40% of long-term capital gains are excluded, which matters for retirees selling farmland or a business. Add the $1,600 primary residence credit and a North Dakota retiree's state tax bill is often zero.

Almost everyone wins on income tax; the question is by how much. A married couple under six figures of taxable income pays nothing, and a $250,000 household pays about $2,700, versus well over $10,000 in Minnesota next door. High earners face the lowest top rate of any income-tax state at 2.5%, and investors pay an effective 1.5% on long-term gains. Retirees owe nothing on Social Security and military pensions and little on anything else. The costs sit elsewhere: property taxes near 1% and combined sales taxes around 7%. Couples face a marriage penalty in the bracket structure, partly offset by a credit.

The median household income in North Dakota is $60,000, which is $50,390 a year ($4,199 a month) after all taxes. That is close to the national median. After adjusting for cost of living, the purchasing power of that take-home is equivalent to $54,772 in an average-cost area.

North Dakota ranks #10 of 50 for raw take-home pay and #10 for cost-adjusted purchasing power at $100,000. The two rankings match because the cost of living is near average. The best state (Alaska) leaves $79,125; the worst (Oregon) leaves $70,932. North Dakota is $691 behind the leader.

North Dakota Tax Questions, Answered

Compare North Dakota with Other Midwest States

Specific Salaries in North Dakota