Mississippi Income Tax Rate
4.00% flat rate
Everyone pays 4.00% of taxable income, regardless of income level or filing status.
Key Facts That Affect Your Take-Home Pay
- Mississippi uses a progressive income tax system with just two brackets, starting at 4% for the first $10,000 of income and escalating to a top rate of 5% for income above $10,000 (for all filing statuses), making Mississippi's bracket structure the simplest among progressive states with only two rates.
- Mississippi's progressive brackets are extremely compressed, meaning the first bracket covers only the first $10,000 of income, so virtually all middle and high earners immediately reach the top 5% rate. For a $75,000 earner, ~ $65,000+ of income is taxed at 5%, making the effective rate very close to the flat 5% rate.
- Mississippi does not collect income taxes from cities or counties, ensuring consistent tax calculations regardless of work location. All Mississippi residents have the same income tax structure—only the state progressive brackets apply.
- Mississippi does not impose state income tax on Social Security benefits or retirement distributions (pensions, 401(k) withdrawals, IRA distributions) for residents, making the state attractive for retirees despite the progressive income tax structure. However, property taxes and sales taxes in Mississippi can be significant, offsetting some retirement benefits.
Common Mistakes People Make
Misconception: 'Progressive tax means I'll pay different rates across brackets in Mississippi.' Reality: Mississippi's progressive system is so compressed (only two brackets, with the first covering just $10,000) that virtually all taxpayers earning above $15,000-$20,000 pay the top 5% rate on almost all their income. A $75,000 earner pays 5% on ~ $65,000+ of their income, making their effective rate around 4.9%-5%—essentially a flat 5% rate for most taxpayers. The 'progressive' label is technically accurate but practically irrelevant for most earners.
Misconception: 'Mississippi has low taxes because it's a low-income state.' Reality: Mississippi's income tax is effectively a flat 5% for most earners (due to compressed brackets), which is higher than many flat-tax states like Pennsylvania (3.07%), Indiana (3.15%), or North Carolina (4.75%). Additionally, Mississippi's 7% state sales tax (plus local additions in some areas) is among the higher state sales tax rates in the nation Lower-income residents pay a large percentage of income to sales tax, while higher earners pay 5% income tax. The overall tax burden can be significant.
Misconception: 'No local taxes means Mississippi is cheaper than other states.' While Mississippi avoids local income tax complications, the effective 5% income tax rate combined with high sales taxes (7% state rate, one of the highest in the nation) and property taxes can create a significant tax burden. A big spender in Mississippi might pay more in sales tax than they'd pay in income tax in some other states. Factor in all taxes when comparing Mississippi to other states.
One Thing to Know
Mississippi has the simplest bracket structure in the nation—just two brackets covering only $10,000. This means someone earning $15,000 pays the same top rate (5%) as someone earning $150,000, making the 'progressive' label practically meaningless for most taxpayers.
Important Notes
These calculations are estimates based on current tax law. Your actual take-home pay varies based on:
- Pre-tax deductions (401(k), health insurance, HSA, etc.)
- Your W-4 withholding elections
- Additional income or deductions at tax time
- Individual circumstances and tax situations
Tax rates are subject to change. Federal and state tax laws may be updated annually. This is not tax advice. For personalized help, consult a tax professional familiar with Mississippi tax laws.