Mississippi Paycheck Calculator

Mississippi has been dismantling its income tax in stages. The old system had brackets at 3%, 4% and 5%; the 3% band was eliminated, the 5% rate removed, and the remaining rate cut to 4% while the exempt band was raised to $10,000.

In 2025 the legislature went further, passing a measure that reduces the rate in annual steps and then ties further reductions to revenue growth triggers, with full elimination as the stated endpoint. Whether the triggers are met is a matter for future budgets, but the direction of travel is unambiguous and the mechanism is now in statute.

For a worker today the practical position is straightforward: no state tax on the first $10,000 of taxable income, 4% above it, and a reasonable expectation that the rate will keep falling.

Mississippi has the highest state-level grocery tax in the country. Groceries were taxed at the full 7% state sales rate until 2025, when legislation paired with the income tax cuts reduced the rate on food while raising the tax on motor fuel.

That trade — lower income tax, higher consumption and fuel taxes — makes Mississippi's overall burden more regressive than the income tax alone suggests. Households spending most of what they earn see less benefit from an income tax cut than higher earners do, and pay more of the offsetting increases.

Property taxes are low by national standards, and Mississippi's overall state and local burden is among the lowest in the country in absolute terms, though the state also has the lowest median household income, so the burden as a share of income is less favourable than the raw figures suggest.

Mississippi does not tax retirement income at all for taxpayers who have reached retirement age. Social Security, pensions, 401(k) distributions and IRA withdrawals are all exempt, with no cap and no income limit.

That is among the most generous treatments in the United States — more generous than most states that market themselves to retirees. Combined with low property taxes and a low cost of living, it makes Mississippi financially attractive for retirement even though it is rarely discussed in that context.

Early withdrawals taken before retirement age are taxable. No Mississippi city or county levies an income tax, and the state runs no payroll programmes, so a Mississippi payslip carries only federal deductions plus the state income tax.