Minnesota Paycheck Calculator 2026 — 5.35% to 9.85% Tax, PFML 0.7%, Overtime at 48 Hours
See exactly how much you take home in Minnesota after federal tax, state tax, and PFML — enter your salary below and get instant 2026 results.
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🌲 Minnesota Paycheck Calculator 2026
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Minnesota has no local/city income tax — Minneapolis, St. Paul, Duluth and Rochester all charge $0 local tax on wages.
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🌲 Minnesota Facts 2026
- 🏔️ Progressive income tax: 5.35% to 9.85% across four brackets
- 🚫 No SDI — Minnesota has no State Disability Insurance
- 👶 PFML: 0.70% employee contribution on first $183,000 of wages (new since Jan 1, 2026)
- 🏙️ No local/city income tax anywhere in Minnesota
- ⏱️ Overtime paid at 1.5x after 48 hours/week — not the usual 40
- 💰 Minimum wage 2026: $11.41/hr for All employers
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Minnesota Tax Information — Progressive Brackets, PFML 0.7%, Overtime at 48 Hours, No SDI, $11.41 Min Wage
Minnesota has a progressive state income tax system with four brackets. For 2026, the rates and brackets are:
- 5.35% on the first $33,310 of taxable income
- 6.80% on income from $33,311 to $109,430
- 7.85% on income from $109,431 to $203,150
- 9.85% on income of $203,151 or more
For married couples filing jointly, the brackets are different. The 5.35% bracket applies to the first $48,700. The 6.80% bracket applies to income from $48,701 to $193,480. The 7.85% rate applies from $193,481 to $337,930. The top rate of 9.85% applies to income over $337,930.
For head of household filers, the 5.35% bracket applies to the first $41,010. The 6.80% bracket applies from $41,011 to $164,800. The 7.85% rate applies from $164,801 to $270,060. The top rate of 9.85% applies to income over $270,060.
Minnesota allows a standard deduction. For single filers, the standard deduction is $15,300. For married couples filing jointly, it is $30,600. For head of household, it is $23,000. Married filing separately gets $15,300. You can also claim personal exemptions for dependents.
(These 2026 brackets and deductions were raised by a 2.369% inflation adjustment from 2025, per the Minnesota Department of Revenue’s official December 2025 announcement.)
PFML — Paid Family and Medical Leave 0.7% starting 2026
This is a new tax starting January 1, 2026. Minnesota has a Paid Family and Medical Leave program. The employee contribution rate is 0.7% of your gross wages. This applies only to the first $183,000 of earnings per year.
For example, if you earn $100,000 per year, your PFML contribution is $700 per year. This is about $26.92 per biweekly paycheck. This tax funds paid leave for bonding with a new child or recovering from a serious illness.
No SDI — Minnesota Has No State Disability Insurance
Many workers moving from California ask if Minnesota has SDI. The answer is no. Minnesota does not have State Disability Insurance. Unlike California where workers pay 1.1% SDI on gross pay, Minnesota workers pay nothing for SDI. The PFML tax is different and replaces some disability coverage.
Overtime at 48 Hours — Minnesota’s Unique Rule
This is very important for hourly workers. Most states follow the federal rule of overtime at 40 hours per week. Minnesota does not. Minnesota law requires employers to pay one and a half times your regular rate for all hours worked over 48 hours in a seven-day workweek.
For example, if you earn $20 per hour, your overtime rate is $30 per hour. If you work 50 hours in a week, you get 48 hours at regular pay and 2 hours at overtime pay. Our calculator uses this correct 48-hour rule.
No Local Income Tax
No city in Minnesota charges local income tax. Minneapolis, St. Paul, Duluth, and Rochester all have $0 local tax. Unlike New York City where you pay up to 3.9% local tax, Minnesota cities take nothing from your paycheck.
Minimum Wage 2026 — $11.41 Per Hour
The Minnesota minimum wage for 2026 is $11.41 per hour for all employers, effective January 1, 2026 — a 2.5% inflation adjustment from $11.13 in 2025. Minnesota eliminated its previous two-tier system that set a lower rate for small employers; the $11.41 rate now applies to businesses of every size. A 90-day training wage of $9.31 per hour applies to workers under age 20.
Note: Minneapolis has its own local minimum wage of $16.37/hour, and St. Paul’s ranges from $14.25 to $16.37 depending on employer size — both higher than the state rate.
What About Sales Tax?
Minnesota has a state sales tax of 6.875%. Local taxes can add up to 1.5%, making the total sales tax up to 8.375% in some areas. Sales tax is not deducted from your paycheck. It does not affect your take-home pay, but it does affect your budget.
Reciprocal Agreements with Michigan and North Dakota
Minnesota has reciprocity agreements with Michigan and North Dakota. If you live in these states but work in Minnesota, you do not pay Minnesota tax. You pay tax only to your home state.
How Minnesota Compares to Neighboring States
Wisconsin has an income tax from 3.54% to 7.65%. Iowa has a tax from 4.40% to 6.00%. North Dakota ranges from 1.10% to 2.90%. South Dakota has no income tax at all. Minnesota has a higher minimum wage of $11.41 compared to $7.25 in Iowa and North Dakota.
A Note on Federal Taxes
You still pay federal income tax, Social Security tax, and Medicare tax. The federal tax brackets for 2026 range from 10% to 37%. Social Security tax is 6.2% on the first $184,500 you earn. Medicare tax is 1.45%. High earners pay an extra 0.9% Medicare tax on income over $200,000 (single) or $250,000 (married filing jointly).
PFML — Minnesota's New Paid Family and Medical Leave Tax 0.7% Starting 2026
What is PFML in Minnesota?
PFML stands for Paid Family and Medical Leave. This is a new tax starting January 1, 2026 . Minnesota created this program to provide paid leave for workers who need time off for family or medical reasons. This is NOT the same as SDI (State Disability Insurance). Minnesota does not have SDI. PFML is a separate program that covers both family leave and medical leave.
What is the PFML Tax Rate?
The PFML tax rate for employees in 2026 is 0.7% of your gross wages. You pay this tax only on the first $183,000 of earnings per year. For example, if you earn $100,000 per year, your PFML contribution is $700 per year. That is about $26.92 per biweekly paycheck or $13.46 per weekly paycheck. If you earn $200,000 per year, you pay PFML on the first $183,000 only. Your PFML contribution is $1,281 per year.
What Benefits Does PFML Provide?
The PFML program provides paid leave for three main reasons. First, you can take leave to bond with a new child after birth, adoption, or foster care placement. Second, you can take leave to care for a family member with a serious health condition. Third, you can take leave for your own serious health condition that prevents you from working.
How Much Leave Can You Take?
The PFML program provides up to 12 weeks of paid leave per year for family leave or medical leave. You can take up to 26 weeks total in a year if you need both types of leave. The benefit amount is up to 90% of your average weekly wage. For 2026 , the maximum weekly benefit is expected to be around $1,500 to $1,800 per week.
Do Employers Pay PFML Too?
Yes. The total PFML contribution is split between employees and employers. Employees pay 0.7% of wages. Employers pay the remaining portion. Only the employee portion is deducted from your paycheck.
Why This Tax Does Not Appear on Most Calculators
Most online paycheck calculators, including ADP and Gusto, do not include PFML yet. This is a new tax for 2026 . Many calculators are still using old data. Our calculator includes PFML at the correct 0.7% rate so you get an accurate estimate of your take-home pay.
How This Compares to Other States
Several other states have paid leave programs. California has SDI at 1.1%. New Jersey has TDI and FLI. Minnesota’s PFML rate of 0.7% is lower than California’s 1.1% SDI. It is similar to Oregon’s 0.6% PFML.
Who Pays This Tax?
All employees in Minnesota pay PFML tax on their wages. If you work remotely for an out-of-state company but live in Minnesota, you still pay PFML tax. This tax is based on where you live.
When Does PFML Start?
The PFML tax begins on January 1, 2026 . Your employer will start deducting 0.7% from your paycheck starting with your first paycheck in January 2026 . Benefits become available on January 1, 2026 as well.
Real Example — What a $100,000 Salary Looks Like in Minnesota with PFML and Overtime at 48 Hours
Let us walk through a real example. Meet Mason. Mason lives in Minneapolis, Minnesota. He earns $100,000 per year. He is single. He has no dependents. He contributes 5% to his 401k and pays $150 per paycheck for health insurance.
Here is exactly how his paycheck breaks down step by step. This includes Minnesota’s PFML tax and the correct overtime rule of 48 hours.
Step 1 – Gross Pay Per Year Mason earns $100,000 per year. He gets paid every two weeks. That means 26 paychecks per year. $100,000 divided by 26 equals $3,846.15 gross pay per paycheck before any deductions.
Step 2 – Pre-tax Deductions Mason contributes 5% of his salary to his 401k. $3,846.15 times 0.05 equals $192.31 per paycheck going to his retirement account. He also pays $150 per paycheck for health insurance. Both are pre-tax deductions. Total pre-tax deductions per paycheck: $192.31 plus $150 equals $342.31.
Step 3 – Taxable Gross Pay for Federal Taxes Taxable gross pay for federal taxes is what remains after pre-tax deductions are removed. $3,846.15 minus $342.31 equals $3,503.84 taxable gross per paycheck.
Step 4 – Federal Income Tax To calculate federal tax, we first annualize the taxable gross pay. $3,503.84 times 26 paychecks equals $91,099.84 annual taxable income. Subtract the federal standard deduction for a single filer. That is $16,100 in 2026. Taxable income becomes $74,999.84.
Now apply the 2026 federal tax brackets for a single filer:
He pays 10% on the first $12,400. That equals $1,240.
He pays 12% on income from $12,401 to $50,400. That equals $4,560.
He pays 22% on the remaining income from $50,401 to $74,999.84. That equals $5,411.96.
Total annual federal tax: $1,240 plus $4,560 plus $5,411.96 equals $11,211.96. Divide by 26 paychecks. Federal tax per paycheck is approximately $431.23.
Step 5 – Minnesota State Income Tax First, we need Mason’s Minnesota taxable income. His gross income is $100,000. Subtract his pre-tax deductions of $8,900 per year. Adjusted gross income is $91,100. Subtract the Minnesota standard deduction for a single filer. That is $15,300 in 2026.
Minnesota taxable income: $91,100 minus $15,300 equals $75,800. Now apply the 2026 Minnesota tax brackets for a single filer:
5.35% on the first $33,310. That equals $1,782.09.
6.80% on the next $42,490 (from $33,311 to $75,800). That equals $2,889.32.
Total Minnesota state tax: $1,782.09 plus $2,889.32 equals $4,671.41 per year. Divide by 26 paychecks. State tax per paycheck is approximately $179.67.
Step 6 – PFML (Paid Family and Medical Leave) PFML rate is 0.7% on the first $183,000 of wages. Mason’s salary of $100,000 is below the cap. 0.7% of $100,000 is $700 per year. Divide by 26 paychecks. PFML per paycheck is approximately $26.92.
Step 7 – Social Security and Medicare FICA taxes are calculated on gross pay before pre-tax deductions. Social Security is 6.2% of gross pay. $3,846.15 times 0.062 equals $238.46 per paycheck. Medicare is 1.45% of gross pay. $3,846.15 times 0.0145 equals $55.77 per paycheck. Total FICA per paycheck: $238.46 plus $55.77 equals $294.23.
Step 8 – Net Pay Take-Home Pay Now subtract all deductions from gross pay:
Gross pay: $3,846.15
Minus pre-tax deductions: $342.31
Minus federal tax: $431.23
Minus Minnesota state tax: $179.67
Minus PFML: $26.92
Minus Social Security: $238.46
Minus Medicare: $55.77
Here is the math: $3,846.15 minus $342.31 equals $3,503.84. $3,503.84 minus $431.23 equals $3,072.61. $3,072.61 minus $179.67 equals $2,892.94. $2,892.94 minus $26.92 equals $2,866.02. $2,866.02 minus $238.46 equals $2,627.56. $2,627.56 minus $55.77 equals $2,571.79.
Mason’s net take-home pay per biweekly paycheck is approximately $2,571.79.
Summary – Where Did Mason’s Money Go?
From each $3,846.15 paycheck:
$192.31 goes to his 401k retirement account
$150 goes to his health insurance premium
$431.23 goes to federal income tax
$179.67 goes to Minnesota state income tax
$26.92 goes to PFML (new for 2026)
$238.46 goes to Social Security
$55.77 goes to Medicare
After all these deductions, Mason takes home $2,571.79 in net pay per paycheck. This means Mason keeps approximately 67% of his gross pay. The other 33% goes to federal taxes, state taxes, PFML, retirement, and health insurance.
What About Overtime? Minnesota’s Unique Rule
Most states pay overtime after 40 hours per week. Minnesota pays overtime after 48 hours per week. If Mason works 50 hours in one week at $25 per hour, here is the difference:
In most states (40-hour threshold): 40 hours at $25 equals $1,000, plus 10 overtime hours at $37.50 equals $375. Total gross = $1,375.
In Minnesota (48-hour threshold): 48 hours at $25 equals $1,200, plus 2 overtime hours at $37.50 equals $75. Total gross = $1,275.
Minnesota workers earn $100 less for the same 50-hour week compared to workers in other states.
What If Mason Lived in Wisconsin Instead?
Wisconsin has a progressive income tax from 3.54% to 7.65%. For a $100,000 salary, Wisconsin state tax would be approximately $5,500. Minnesota state tax is $4,671. Minnesota gives Mason about $829 more per year in lower state taxes.
What If Mason Lived in North Dakota Instead?
North Dakota has a progressive income tax from 1.10% to 2.90%. For a $100,000 salary, North Dakota state tax would be approximately $2,000. Minnesota gives Mason about $2,671 less per year in state taxes. But North Dakota has much lower minimum wage at $7.25.
What If Mason Lived in South Dakota Instead?
South Dakota has no state income tax. For a $100,000 salary, South Dakota state tax is $0. Minnesota charges $4,671. However, South Dakota minimum wage is $11.85, slightly higher than Minnesota’s $11.41. South Dakota also has no PFML tax.
What If Mason Increased His 401k to 10%?
If Mason increased his 401k contribution from 5% to 10%, his 401k deduction would double from $192.31 to $384.62 per paycheck. His taxable income would decrease. His federal tax would drop by about $42 per paycheck, and his Minnesota state tax would drop by about $13 per paycheck. His net pay would only decrease by about $137 per paycheck. At the same time, he would save an additional $192 for retirement.
What If Mason Was Married Filing Jointly with the Same $100,000 Household Income?
If Mason was married and filing jointly with the same $100,000 household income, his federal tax would drop from $11,211.96 per year to approximately $6,572 per year, using the 2026 MFJ standard deduction of $32,200. His Minnesota state tax would also decrease, from $4,671 to approximately $3,408 per year (using the MFJ standard deduction of $30,600). Combined, his net pay would increase by about $227 per paycheck.
What If Mason Had Two Children?
If Mason had two children under 17, he would receive a $2,200 child tax credit per child in 2026, totaling $4,400. This credit directly reduces his federal tax bill. His federal tax would drop from $11,211.96 to approximately $6,811.96 per year. His net pay would increase by about $169 per paycheck.
Why PFML Matters
Most online calculators ignore PFML entirely. On a $100,000 salary, PFML reduces your take-home pay by about $27 per biweekly paycheck or $700 per year. While not huge, it is real money out of your pocket. Our calculator includes this deduction so you get an accurate picture of your real take-home pay.
Use Our Calculator to Test Your Own Numbers
Try our calculator above. Change the salary to your actual earnings. Change the filing status if you are married. Add your dependents. Increase or decrease your 401k contribution. The calculator includes PFML and the correct overtime rule of 48 hours. See exactly how much you take home in Minnesota. The calculator updates instantly with your numbers.
Minnesota vs Wisconsin vs Iowa vs North Dakota vs South Dakota vs Texas — Which State is Best for Your Paycheck?
Choosing where to live and work has a huge impact on your take-home pay. Minnesota has a progressive income tax up to 9.85%. Wisconsin and Iowa also have progressive taxes. North Dakota has lower rates. South Dakota and Texas have no state income tax. Here is the real difference so you can decide which state is best for your situation.
Same Salary, Different State — The Real Difference
Let us compare a $100,000 salary across six states. Same filing status of single, same deductions, same everything. Only the state changes.
Minnesota
- State income tax: approximately $4,671 per year
- PFML (0.7%): $700 per year
- Total state deductions: $5,371 per year
- Take-home pay: approximately $2,572 per biweekly paycheck
- State sales tax: 6.875% (up to 8.375% with local)
- Minimum wage: $11.41 per hour
- Overtime threshold: 48 hours per week
Wisconsin
- State income tax (progressive 3.54% to 7.65%): approximately $5,500 per year
- PFML: None
- Total state deductions: $5,500 per year
- Take-home pay: approximately $2,567 per biweekly paycheck
- State sales tax: 5%
- Minimum wage: $7.25 per hour
- Overtime threshold: 40 hours per week
Wisconsin gives you about $5 less per paycheck than Minnesota.
Iowa
- State income tax (progressive 4.40% to 6.00%): approximately $5,000 per year
- PFML: None
- Total state deductions: $5,000 per year
- Take-home pay: approximately $2,596 per biweekly paycheck
- State sales tax: 6%
- Minimum wage: $7.25 per hour
- Overtime threshold: 40 hours per week
Iowa gives you about $24 more per paycheck than Minnesota.
North Dakota
- State income tax (progressive 1.10% to 2.90%): approximately $2,000 per year
- PFML: None
- Total state deductions: $2,000 per year
- Take-home pay: approximately $2,726 per biweekly paycheck
- State sales tax: 5%
- Minimum wage: $7.25 per hour
- Overtime threshold: 40 hours per week
North Dakota gives you about $154 more per paycheck than Minnesota.
South Dakota
- State income tax: $0 per year
- PFML: None
- Total state deductions: $0 per year
- Take-home pay: approximately $2,803 per biweekly paycheck
- State sales tax: 4.5%
- Minimum wage: $11.85 per hour
- Overtime threshold: 40 hours per week
South Dakota gives you about $231 more per paycheck than Minnesota.
Texas
- State income tax: $0 per year
- PFML: None
- Total state deductions: $0 per year
- Take-home pay: approximately $2,803 per biweekly paycheck
- State sales tax: 6.25%
- Minimum wage: $7.25 per hour
- Overtime threshold: 40 hours per week
Texas gives you about $231 more per paycheck than Minnesota.
The Difference — How Much More You Take Home
South Dakota and Texas give you about $231 more per biweekly paycheck than Minnesota. That is $6,006 more per year. North Dakota gives you about $154 more per paycheck, or $4,004 more per year. Iowa gives you about $24 more per paycheck, or $624 more per year. Wisconsin gives you about $5 less per paycheck, or $130 less per year.
What About Sales Tax? — Affects Your Budget
Sales tax does not affect your paycheck, but it affects how far your money goes. If you spend $3,000 per month on taxable goods:
- Minnesota (6.875% to 8.375%): $206 to $251 per month
- Wisconsin (5% to 5.5%): $150 to $165 per month
- Iowa (6% to 7%): $180 to $210 per month
- North Dakota (5% to 8%): $150 to $240 per month
- South Dakota (4.5%): $135 per month
- Texas (6.25%): $188 per month
What About Minimum Wage? — Important for Hourly Workers
Minimum wage affects hourly workers significantly:
- Minnesota: $11.41 per hour
- Wisconsin: $7.25 per hour
- Iowa: $7.25 per hour
- North Dakota: $7.25 per hour
- South Dakota: $11.85 per hour
- Texas: $7.25 per hour
Minnesota has a much higher minimum wage than Wisconsin, Iowa, North Dakota, and Texas. Only South Dakota has a slightly higher minimum wage at $11.85.
What About Overtime Threshold? — Unique Minnesota Rule
Minnesota pays overtime after 48 hours per week. All other states in this comparison pay overtime after 40 hours per week. If you work 50 hours per week at $20 per hour:
- Minnesota: 48 hours at $20 equals $960, plus 2 hours at $30 equals $60. Total $1,020.
- Other states: 40 hours at $20 equals $800, plus 10 hours at $30 equals $300. Total $1,100.
Minnesota vs Neighbors — Summary
Who Should Choose Minnesota? Minnesota is best for hourly workers who benefit from the $11.41 minimum wage. It is best for workers who want PFML benefits (paid family and medical leave). It is best for families who value good public schools funded by state taxes.
Who Should Choose Wisconsin? Wisconsin is best for workers who want lower sales tax. It is best for people who work significant overtime (40-hour threshold).
Who Should Choose North Dakota? North Dakota is best for people who want much lower income taxes.
Who Should Choose South Dakota? South Dakota is best for retirees because there is no state tax on retirement income. It is best for people who want no income tax and no PFML tax.
Who Should Choose Texas? Texas is best for high earners who want to avoid state income tax entirely.
The Bottom Line on Minnesota Taxes
Minnesota has a progressive income tax from 5.35% to 9.85%, plus a new PFML tax of 0.7% starting 2026. The minimum wage is $11.41 per hour. Sales tax is 6.875% to 8.375%. Overtime is paid after 48 hours, not 40.
Use Our Calculator to Compare for Yourself
Try our calculator above. Change the state from Minnesota to Wisconsin, Iowa, North Dakota, South Dakota, or Texas. See exactly how much more you would take home in each state. Everything you need is right here.
Remote Work and Minnesota Taxes — Complete Guide for Remote Workers
Minnesota has become a popular destination for remote workers, especially those who work for companies in other states. Here is what every remote worker needs to know about taxes when working from Minnesota.
If You Live in Minnesota and Work Remotely for an Out-of-State Company
You pay Minnesota state income tax. Minnesota taxes your wages based on where you live, not where your employer is located. Even if your company is in Wisconsin, Iowa, North Dakota, South Dakota, Texas, California, or any other state, you pay Minnesota state income tax because you live in Minnesota.
For example, if you live in Minneapolis and work remotely for a company based in Chicago, you pay Minnesota state income tax. Your employer should withhold Minnesota tax from your paycheck. You also pay Minnesota’s PFML tax of 0.7% on the first $183,000 of wages. This applies regardless of where your employer is located.
If You Live in Another State but Work Remotely for a Minnesota Company
You pay state tax to the state where you live, not to Minnesota. Minnesota taxes non-residents only on wages earned while physically working in Minnesota. If you work from your home office in another state, you do not pay Minnesota tax.
However, if your employer requires you to come to Minnesota for meetings or training, the days you work in Minnesota are taxable by Minnesota. For example, if you live in Wisconsin but work remotely for a Minneapolis company, you pay Wisconsin state tax. You do not pay Minnesota tax if you never work in Minnesota.
Reciprocal Agreements — Minnesota with Michigan and North Dakota
Minnesota has reciprocity agreements with Michigan and North Dakota. This means if you live in Michigan or North Dakota and work in Minnesota, you pay tax only to your home state. Your employer should withhold tax for your home state, not Minnesota.
If you live in Minnesota and work in Michigan or North Dakota, you pay tax only to Minnesota. Your employer should withhold Minnesota tax. There is no reciprocity with Wisconsin or Iowa. If you live in Wisconsin and work in Minnesota, you pay Minnesota tax on your wages earned in Minnesota, then get a credit on your Wisconsin return.
If You Split Your Time Between Minnesota and Another State
If you live in Minnesota part of the year and another state part of the year, you need to track your days carefully. You pay tax to each state for the days you work while physically in that state.
If you work more than 183 days in Minnesota, you are considered a Minnesota resident for tax purposes and must pay Minnesota tax on all your income. Keep a log of where you work each day. Save your flight tickets, hotel receipts, and work location records.
What About the Convenience of the Employer Rule?
Some states have a convenience of the employer rule. This means if you choose to work remotely for your own convenience rather than because your employer requires you to be remote, you still pay tax to the state where your employer is located. New York has this rule.
Minnesota does NOT have a convenience of the employer rule. In Minnesota, you are taxed based on where you physically perform your work. If you live in Minnesota and work from your home office, you pay Minnesota tax regardless of where your employer is located.
PFML, Sales Tax, and Minimum Wage for Remote Workers
PFML: If you live in Minnesota, you pay PFML tax of 0.7% on the first $183,000 of wages. This applies regardless of where your employer is located.
Sales Tax: Minnesota state sales tax is 6.875%. Local taxes can add up to 1.5%, making the total sales tax up to 8.375% in some areas.
Minimum Wage: Minnesota minimum wage for 2026 is $11.41 per hour for all employers (Minnesota removed the large/small employer tiers in 2026). This applies to remote workers who are employees of Minnesota companies.
Real Examples for Remote Workers
Example One: Living in MN, Working for WI Company Meet Mason. He lives in Minneapolis, Minnesota and works remotely for a tech company based in Milwaukee, Wisconsin. He earns $120,000 per year.
He pays Minnesota state income tax of approximately $6,500 per year.
He pays PFML tax of 0.7% = $840 per year.
He pays $0 Wisconsin state tax because he does not live or work in Wisconsin.
Example Two: Living in WI, Working for MN Company Meet Sophia. She lives in Milwaukee, Wisconsin but works remotely for a Minneapolis company. She earns $120,000 per year.
She pays Wisconsin state tax of approximately $6,600 per year.
She pays $0 Minnesota tax because she does not work in Minnesota.
She pays $0 PFML tax (Wisconsin has no paid leave tax).
Example Three: Reciprocity Agreement (ND to MN) Meet David. He lives in Fargo, North Dakota but works remotely for a Minneapolis company. He earns $120,000 per year. Because of the reciprocity agreement, he pays North Dakota state tax only.
North Dakota tax is about $2,400.
Minnesota tax would be about $6,500.
He saves about $4,100 per year.
Tips for Remote Workers in Minnesota
Keep a daily log: Track your location for each day you work.
Update your W-4: Make sure your employer withholds Minnesota tax correctly if you live in Minnesota.
Check for “Convenience Rules”: If your employer is in New York, consult a tax professional.
Budget for Sales Tax: Remember that Minnesota sales tax ranges from 6.875% to 8.375%.
Use Our Calculator to See Your Take-Home Pay
Our calculator above works for remote workers too. Enter your salary, select Minnesota as your state, and see your take-home pay including Minnesota state tax and PFML. The calculator updates instantly with your numbers. Everything you need is right here.
How to Save on Federal Taxes in Minnesota — 7 Legal Strategies
While Minnesota has its own state income tax (5.35% to 9.85%) and the new PFML tax (0.7%), you still pay federal income tax, Social Security tax, and Medicare tax. Here are seven legal ways to reduce your federal tax bill and keep more of your paycheck. These strategies work for both hourly and salaried workers in Minnesota.
Strategy One — Increase Your 401k Contributions
Every dollar you contribute to your 401k reduces your taxable income. If you earn $100,000 per year and increase your 401k contribution by 1% ($1,000 per year), your taxable income drops to $99,000. If you are in the 22% federal bracket, you save $220 in federal taxes. Your paycheck only drops by about $60 because of the tax savings.
Additionally, 401k contributions also reduce your Minnesota taxable income, saving you state taxes too. For a Minnesota worker in the 6.80% bracket, that $1,000 contribution saves you another $68 in state taxes.
Strategy Two — Contribute to an HSA (Health Savings Account)
If you have a high-deductible health plan, you can contribute to an HSA. In 2026, you can contribute up to $4,400 for individual coverage or $8,750 for family coverage. HSA contributions are pre-tax, meaning they reduce your federal taxable income. They also reduce your Minnesota taxable income.
Strategy Three — Use Your FSA (Flexible Spending Account)
If your employer offers an FSA, you can contribute up to $3,400 per year in 2026. FSA contributions are pre-tax and reduce your federal and Minnesota taxable income. You can use the money for medical expenses, dental care, vision care, prescription drugs, and even dependent care.
Strategy Four — Claim All Dependents You Qualify For
Each dependent child under 17 gives you a $2,200 child tax credit in 2026. This credit directly reduces your federal tax bill dollar for dollar. If you have two children, that is $4,400 less tax you owe. Other dependents like elderly parents or adult children with disabilities may qualify for a $500 credit for other dependents.
Strategy Five — Itemize Deductions If You Have Enough
The standard deduction for 2026 is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for head of household. If your itemized deductions exceed these amounts, you should itemize. Common deductions include:
- Mortgage interest
- State and local taxes up to $10,000 (including MN state tax, PFML tax, and property taxes)
- Charitable donations
- Medical expenses exceeding 7.5% of your income
Strategy Six — Contribute to a Traditional IRA
If your employer does not offer a 401k, you can contribute to a traditional IRA. In 2026, you can contribute up to $7,000 per year ($8,000 if you are age 50 or older). This contribution reduces your federal taxable income and also reduces your Minnesota taxable income.
Strategy Seven — Harvest Tax Losses on Your Investments
If you have investments that have lost value, you can sell them to realize the loss. These capital losses can offset capital gains. If your losses exceed your gains, you can deduct up to $3,000 per year against your ordinary income.
Quick Summary — Which Strategy is Best?
- Saving for retirement? Increase your 401k to 10%–15%.
- High-deductible health plan? Max out your HSA first for triple tax benefits.
- Have children? Claim the child tax credit on your W-4 to increase each paycheck.
- Homeowner with high interest? Itemize your deductions if they exceed the standard deduction.
- Investments in a brokerage account? Use tax loss harvesting to offset gains.
A Note on Minnesota’s Unique Tax Situation
Minnesota has a progressive income tax up to 9.85%, plus the new PFML tax of 0.7% starting 2026. Minimum wage is $11.41 per hour. Overtime is paid after 48 hours per week, not 40.
For a worker in Minnesota earning $100,000, the combined federal and Minnesota marginal tax rate can be over 28%. Every $1,000 in pre-tax contributions saves you over $280 in combined taxes.
Use Our Calculator to See Your Tax Savings
Try our calculator above. Increase your 401k contribution by 1%, 2%, or 5% and watch your take-home pay change. Add dependents and see your federal tax liability drop. The calculator updates instantly with every change and includes Minnesota’s PFML tax and the 48-hour overtime rule.
Frequently Asked Questions — Minnesota Paycheck & Taxes
Here are answers to the most common questions people ask about Minnesota paychecks, taxes, and take-home pay.
Minnesota has four progressive tax brackets: 5.35%, 6.80%, 7.85%, and 9.85%. For single filers, the 5.35% rate applies to income up to $33,310, rising to 9.85% on income over $203,150. Brackets are wider for married couples filing jointly and head of household filers.
PFML stands for Paid Family and Medical Leave. Starting January 1, 2026, Minnesota deducts 0.7% of your gross wages (up to $183,000 per year) to fund paid leave for bonding with a new child or recovering from a serious illness.
No. Minnesota does not have State Disability Insurance, unlike states such as California (1.1% SDI). Minnesota's PFML program covers similar situations instead.
No. No city in Minnesota, including Minneapolis, St. Paul, Duluth, or Rochester, charges a local income tax on wages.
Minnesota requires overtime pay (1.5x your regular rate) after 48 hours worked in a seven-day workweek, not after 40 hours like most states. This applies specifically under Minnesota state law for hourly workers.
The Minnesota minimum wage for 2026 is $11.41 per hour for all employers, effective January 1, 2026. Minneapolis ($16.37/hr) and St. Paul ($14.25–$16.37/hr) have higher local minimums.
For a single filer with no dependents paid biweekly, take-home pay is approximately $2,572 per paycheck, or about $66,870 per year, after federal tax, Minnesota state tax, PFML, Social Security, and Medicare. Your exact number depends on your filing status, 401(k) contributions, and health insurance deductions — use the calculator above for your specific figures.
Yes. Minnesota's state sales tax is 6.875%, and local taxes can add up to 1.5% more, bringing the total to as high as 8.375% in some areas. Sales tax does not affect your paycheck directly.
Yes, Minnesota has income tax reciprocity agreements with Michigan and North Dakota. Residents of these states who work in Minnesota pay tax only to their home state, not to Minnesota.
You pay Minnesota tax. Minnesota does not currently have a reciprocity agreement with Wisconsin (it ended in 2010). Since income tax is generally based on where the work is physically performed, and you're working from your home in Minnesota, your income is taxed by Minnesota as your resident state — regardless of where your employer is based.
No. Because Minnesota has a reciprocity agreement with North Dakota, and because you're physically performing the work in North Dakota, you pay tax only to North Dakota. Your employer should withhold North Dakota tax, not Minnesota tax — you may need to submit Form MWR to your employer to confirm this
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