Explain My Paycheck

How much is Detroit city income tax?

State & Local Taxesintermediate3 answers · 5 min readUpdated February 28, 2026

Quick Answer

Detroit city income tax is 2.4% for residents and 1.2% for non-residents working in Detroit. On a $70,000 salary, Detroit residents pay $1,680 annually in city taxes ($140/month), while non-residents pay $840 annually ($70/month).

Best Answer

SC

Sarah Chen, Payroll Tax Analyst

Best for employees working in Detroit who need to understand city income tax rates and withholding

Top Answer

Detroit city income tax rates


Detroit charges different city income tax rates based on residency:


  • Detroit residents: 2.4% of gross income
  • Non-residents working in Detroit: 1.2% of gross income
  • Non-residents not working in Detroit: 0%

  • This tax is withheld from your paycheck automatically by your employer, similar to federal and state taxes. Detroit is one of 22 Michigan cities that impose local income taxes.


    Example: $70,000 salary impact by residency


    Detroit resident:

  • Annual city tax: $70,000 × 2.4% = $1,680
  • Monthly impact: $140
  • Per paycheck (biweekly): $64.62

  • Non-resident working in Detroit:

  • Annual city tax: $70,000 × 1.2% = $840
  • Monthly impact: $70
  • Per paycheck (biweekly): $32.31


  • How Detroit tax compares to other Michigan cities


    Detroit's 2.4% resident rate is among the highest in Michigan:


  • Grand Rapids: 1.3% residents, 0.65% non-residents
  • Lansing: 1.0% residents, 0.5% non-residents
  • Flint: 1.0% residents, 0.5% non-residents
  • Detroit: 2.4% residents, 1.2% non-residents

  • Understanding your Detroit tax withholding


    Your employer automatically withholds Detroit city tax based on:

  • Work location: Must physically work in Detroit
  • Residency status: Higher rate for residents
  • Income level: Flat percentage regardless of income bracket

  • Key factors affecting Detroit city tax


  • Residency determination: Based on where you live December 31st
  • Multiple work locations: Only pay on income earned in Detroit
  • Retirement income: Detroit taxes pensions and retirement distributions for residents
  • Investment income: Residents pay 2.4% on dividends, interest, capital gains

  • What you should do


    Verify your pay stub shows the correct Detroit tax rate based on your residency. If you move during the year, notify your employer immediately to adjust withholding. Non-residents who stop working in Detroit should ensure withholding stops.


    Use our paycheck calculator to see your total take-home pay after federal, state, and Detroit city taxes.


    Key takeaway: Detroit residents pay 2.4% city income tax while non-residents pay 1.2%. On a $70,000 salary, this means residents pay $840 more annually than non-residents working in the same city.

    *Sources: [City of Detroit Income Tax Division](https://detroitmi.gov/departments/finance-department/income-tax-division), [IRS Publication 15](https://www.irs.gov/pub/irs-pdf/p15.pdf)*

    Key Takeaway: Detroit residents pay 2.4% city income tax while non-residents pay 1.2%, meaning residents pay $840 more annually than non-residents on a $70,000 salary.

    Detroit city income tax impact by salary level and residency status

    Annual SalaryDetroit Resident (2.4%)Non-Resident (1.2%)Monthly DifferenceAnnual Savings (Non-Resident)
    $50,000$1,200/year ($100/month)$600/year ($50/month)$50/month$600/year
    $70,000$1,680/year ($140/month)$840/year ($70/month)$70/month$840/year
    $90,000$2,160/year ($180/month)$1,080/year ($90/month)$90/month$1,080/year
    $120,000$2,880/year ($240/month)$1,440/year ($120/month)$120/month$1,440/year

    More Perspectives

    SC

    Sarah Chen, Payroll Tax Analyst

    Best for people who moved to or from Detroit and need to understand changing tax obligations

    Moving to/from Detroit: Tax rate changes


    Your Detroit city tax obligation changes immediately when you move, but the timing affects your annual tax liability.


    Moving TO Detroit (becoming a resident)


    Before move: 1.2% tax rate (if working in Detroit)

    After move: 2.4% tax rate

    Impact: Tax rate doubles on remaining year's income


    Example: Moving to Detroit in July

    If you earn $80,000 annually and move to Detroit July 1st:

  • First half of year: $40,000 × 1.2% = $480 (non-resident rate)
  • Second half of year: $40,000 × 2.4% = $960 (resident rate)
  • Total annual Detroit tax: $1,440 (vs. $960 full-year non-resident)

  • Moving FROM Detroit (becoming non-resident)


    If you move out of Detroit but continue working there, your rate drops from 2.4% to 1.2%.


    Example: Moving from Detroit in September

    $80,000 annual salary:

  • First 8 months: $53,333 × 2.4% = $1,280 (resident rate)
  • Last 4 months: $26,667 × 1.2% = $320 (non-resident rate)
  • Total annual Detroit tax: $1,600 (vs. $1,920 full-year resident)

  • Important timing considerations


  • Payroll updates: Notify your employer immediately when you move
  • Mid-year rate changes: May require manual payroll adjustment
  • Year-end filing: Detroit requires annual tax return regardless of withholding
  • Refunds/underpayments: Common when rates change mid-year

  • Key takeaway: Moving in/out of Detroit changes your tax rate immediately, potentially saving or costing $800+ annually on a typical salary depending on timing and direction of move.

    Key Takeaway: Moving to or from Detroit changes your tax rate immediately, potentially saving or costing $800+ annually depending on the timing and direction of your move.

    SC

    Sarah Chen, Payroll Tax Analyst

    Best for employees living in Detroit suburbs but working downtown

    Commuting to Detroit from suburbs


    Many Metro Detroit workers live in suburbs like Troy, Southfield, or Dearborn but work downtown. You'll pay Detroit's 1.2% non-resident income tax on wages earned in Detroit, regardless of your suburb's tax status.


    Double taxation concerns


    Some Detroit suburbs also have local income taxes, potentially creating double taxation:


    Cities with local income tax:

  • Troy: No local income tax
  • Southfield: No local income tax
  • Pontiac: 1.0% residents, 0.5% non-residents
  • Highland Park: 2.0% residents, 1.0% non-residents

  • Michigan law generally prevents true double taxation, but you may need to file multiple city returns.


    Example: Living in Pontiac, working in Detroit


    $75,000 salary scenario:

  • Detroit tax (work location): $75,000 × 1.2% = $900
  • Pontiac tax (residence): $75,000 × 1.0% = $750
  • Credit system: Pontiac provides credit for Detroit taxes paid
  • Net additional tax: Roughly $150 (difference between rates)

  • Remote work considerations


    With increased remote work, track which days you physically work in Detroit vs. home. Detroit taxes only apply to income earned while physically present in the city.


    Hybrid schedule example:

  • 3 days/week in Detroit office = 60% of income subject to Detroit tax
  • 2 days/week remote from suburb = 40% not subject to Detroit tax

  • Key takeaway: Suburban residents working in Detroit pay 1.2% city tax, but may receive credits if their home city also has income tax, minimizing double taxation.

    Key Takeaway: Suburban residents working in Detroit pay 1.2% city tax but may receive credits if their home city also has income tax, minimizing double taxation issues.

    Sources

    detroit income taxmichigan city taxlocal income taxcity taxes

    Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026

    This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.