North Dakota Paycheck Calculator

North Dakota's 2023 reform replaced a five-bracket system with three bands, the first of which is taxed at zero. For a single filer that zero band runs to $48,475 of taxable income — and because North Dakota also grants a standard deduction matching the federal figure, the practical threshold before any state tax is owed is around $64,500 of gross income.

The state estimated at the time that roughly 60% of filers would owe no income tax at all under the new structure. Above the threshold, the rates are 1.95% and then 2.5% — lower than the entry rate in most states that tax income.

The reform was funded by oil and gas revenue from the Bakken formation, which has given North Dakota persistent budget surpluses and a large Legacy Fund. That dependence means the state's fiscal position, and by extension the durability of these rates, tracks energy prices.

North Dakota's sales tax is 5% at state level, with local options bringing combined rates to around 7% to 8% in the larger cities — moderate by national standards.

Property taxes are the more significant burden, and the state has repeatedly used its energy surpluses to fund property tax relief programmes, including a primary residence credit that homeowners must apply for each year. As with Nebraska's school district credit, take-up is imperfect because it requires an active claim.

No North Dakota city or county levies an income tax, and there are no state payroll programmes, so a payslip carries federal deductions plus a state income tax that, for many workers, is zero.

North Dakota exempted Social Security benefits from state income tax in 2021, so retirees pay nothing on them regardless of income.

The state's western oil counties have an unusual employment pattern, with large numbers of workers on rotational schedules who maintain residence elsewhere. Those workers owe North Dakota tax on income earned in the state as non-residents, while their home state taxes them as residents with a credit for what North Dakota takes — which, given North Dakota's very low rates, often means the credit is small and the home state collects most of it.

For anyone in that position, the low North Dakota rate provides less benefit than it appears, because the home state simply collects the difference.