What Changes in Your Paycheck in Oregon
Your paycheck in Oregon shows an Oregon state income tax line item that grows progressively with income, starting at 4.75% for the first $1-$1. For a $1 salary, you might see ~ $1-$1 annually (~ $1-$1 per biweekly paycheck) for state tax, reflecting the progressive brackets with effective rates around 7%-8.75%. Oregon paychecks only show state and federal tax deductions—no local income tax line items. The progressive brackets mean your state tax increases as you move through brackets, with higher earners reaching the 9.9% top rate. The lack of sales tax means you won't pay state sales tax on purchases, but your income tax may be higher than in some other states.
Example State Tax in Oregon
What you'll pay in Oregon state income tax at different salary levels (single filer, no deductions):
| Gross Salary | State Tax (Year) | Effective Rate |
|---|---|---|
| $50,000 | $4,090 | 8.2% |
| $75,000 | $6,278 | 8.4% |
| $100,000 | $8,465 | 8.5% |
| $150,000 | $13,128 | 8.8% |
Use the calculator above to see your exact take-home pay with your filing status and deductions.
Key Facts That Affect Your Take-Home Pay
- Oregon uses a progressive income tax system with four brackets, starting at 4.75% for the first $1 of income (single) or $1 (married) and escalating to a top rate of 9.9% for income above $1 (single) or $1 (married), making Oregon's bracket structure relatively simple but with high rates across all brackets.
- Oregon's progressive brackets have a relatively high starting rate (4.75%) compared to many other progressive states that start at 1%-3%, meaning even lower earners pay a higher percentage in Oregon. For a $1 earner, income is taxed across multiple brackets creating an effective rate around 7%-8.75%, with most income taxed at the higher brackets.
- Oregon does not impose income taxes beyond the state rate, meaning consistent tax calculations regardless of work location. All Oregon residents have the same income tax structure—only the state progressive brackets apply.
Is Oregon Better for You?
Oregon works well for:
Oregon works best for big spenders who benefit from no state sales tax, and lower-income earners (under ~ $1 for singles, $1 for couples) who benefit from the progressive brackets with lower starting rates (4.75%-8.75%). At these income levels, effective state tax rates are 5%-7%, which can be competitive with or lower than some flat-tax states when factoring in the lack of sales tax Lower-income retirees (AGI below $1-$1) also benefit from partial exemptions on Social Security and retirement income.
Oregon may not be ideal if:
Oregon is challenging for high earners (~ $1+ for singles, $1+ for couples) because they quickly reach the higher 8.75%-9.9% rates. Someone earning $1 in Oregon pays an effective rate around 8%-9% (~ $1-$1 annually), while the same earner in a flat-tax state like Pennsylvania would pay $1 (3.07% flat, though PA may have local EIT), and in North Carolina would pay $1 (4.75% flat). High earners with geographic flexibility save $1-$1+ annually by moving to lower-tax states, even accounting for the lack of sales tax Higher-income retirees may also pay Oregon tax on retirement distributions.
Common Mistakes People Make
Misconception: 'Progressive tax means I'll pay the top 9.9% on all my income in Oregon.' Reality: Oregon's progressive system starts at 4.75% for the first $1-$1 of income (depending on filing status), and most middle-income earners pay effective rates around 6%-8%, not 9.9%. The 9.9% rate only applies to income above $1 (single) or $1 (married). Someone earning $1 pays an effective rate around 7%-8.75% (~ $1-$1 annually).
Misconception: 'Oregon has no sales tax, so I'll save money overall.' Reality: While Oregon has no sales tax (a significant advantage for spenders), the state relies heavily on income tax with high rates (4.75%-9.9%) to compensate. A high earner in Oregon pays up to 9.9% income tax, which is among the higher rates in the nation. Someone earning $1 might pay $1-$1 annually in Oregon income tax, while the same earner in a flat-tax state like Pennsylvania would pay $1 (3.07% flat, though PA may have local EIT). The lack of sales tax benefits big spenders, but high earners may still pay more in income tax than in lower-tax states.
Misconception: 'Oregon's tax structure is the same as other states with no sales tax.' Reality: Oregon is one of only five states with no sales tax (along with Alaska, Delaware, Montana, and New Hampshire). This creates a unique revenue model where Oregon relies heavily on income tax (progressively higher rates up to 9.9%) rather than sales tax. Unlike zero-income-tax states like Texas or Florida that rely on sales/property taxes, Oregon taxes income progressively while exempting sales transactions from taxation Big spenders benefit from no sales tax, but high earners pay high income tax rates.
One Thing to Know
Oregon is one of only five states with no sales tax, which benefits big spenders, but the state compensates with high income tax rates (starting at 4.75%, topping out at 9.9%). Many people moving to Oregon for the 'no sales tax' benefit are surprised to find their income tax burden is actually higher than in many sales-tax states.
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 Oregon tax laws.