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Wisconsin Taxes: What You Need to Know

Taxes are a significant part of any paycheck, but with a little insight, you can understand exactly where your hard-earned money is going. In Wisconsin, your income is subject to federal, state, and local tax withholdings, along with other deductions like Social Security, Medicare, and pre-tax benefits. Let’s break it down to help you stay informed and ahead of your finances.

Federal, State, and Local Tax Withholding

Whether you’re a full-time employee or an independent contractor, you’ll be paying federal income taxes. The IRS uses a progressive tax system, meaning the more you earn, the higher your tax rate. Wisconsin’s state income tax follows a similar structure, with rates ranging between 3.54% and 7.65%. But that’s not all—you may also encounter local tax obligations depending on where you live or work within the state.

If you receive unemployment benefits, you’re not off the hook either. The IRS and Wisconsin Department of Revenue both treat unemployment as taxable income. To avoid a surprise bill come tax season, you can request automatic withholding—10% for federal taxes and 5% for state taxes—or you can make estimated payments throughout the year.

FICA and State Insurance Taxes

Besides income taxes, you’ll also see FICA (Federal Insurance Contributions Act) taxes being deducted from your paycheck. These taxes fund Social Security and Medicare. Currently, the Social Security portion is set at 6.2% on earnings up to $160,200, while Medicare takes 1.45% of your total earnings. If you’re fortunate enough to be earning more than $200,000, an additional 0.9% Medicare tax kicks in.

And then there’s state unemployment insurance. This tax funds unemployment benefits for Wisconsin workers, and though it’s paid by employers, it still affects your overall compensation structure. Unemployment insurance benefits are considered taxable income at both the state and federal levels.

Pre-Tax Deductions

One of the silver linings when it comes to your paycheck is the ability to reduce your taxable income through pre-tax deductions. Common deductions include contributions to 401(k) retirement accounts, health insurance premiums, and health savings accounts (HSAs). These amounts are subtracted from your gross income, lowering the total amount subject to taxes and ultimately helping you keep more of your money.

For instance, if you’re contributing to a 401(k), the money is deducted before taxes are calculated, meaning you won’t pay income taxes on those contributions right now—this helps you grow your retirement savings while also reducing your current tax liability. Similarly, if you have medical insurance through your employer, your premiums are often deducted pre-tax, further lowering your taxable income.

Wisconsin 2024 Tax Rates and Withholdings:

To give you a clearer picture, here’s a breakdown of the main tax withholdings and rates you can expect for 2024:

Pro Tip: If you’re receiving unemployment benefits, consider having 10% withheld for federal taxes and 5% for state taxes. This helps avoid a hefty tax bill at the end of the year and keeps your finances in check.

Median Household Income in Wisconsin

When it comes to understanding how much Wisconsin households earn, the median income is a key indicator. This figure helps illustrate the financial well-being of the average family across the state. As of 2024, the median household income in Wisconsin is $72,458, which is about 4% lower than the national median of $75,149. While slightly below the U.S. average, Wisconsin still boasts a diverse range of household incomes, with some areas far exceeding state and national averages.

Wisconsin Income Statistics for 2024:

The median household income reflects the midpoint where half of households earn more, and half earn less. To provide a broader context, here’s a snapshot of income statistics for Wisconsin in 2024:

While Wisconsin’s median household income falls slightly behind the national figure, there’s more to the story. Some regions in the state showcase much higher earnings, particularly in wealthier zip codes.

Income by Age of Householder

Household income in Wisconsin also varies significantly depending on the age of the householder. Younger households typically earn less, while income peaks during the prime working years (ages 25 to 64) and tapers off for older households. Here’s a breakdown:

As expected, income grows with age and experience, peaking for those aged 45 to 64 years. These figures reflect the varying financial stages that individuals and families experience throughout life.

Richest Wisconsin Zip Codes

It’s no surprise that some areas in Wisconsin stand out for their high household incomes. The richest zip code, 53097, has a median household income of $148,633, significantly higher than the state’s median. Here’s a look at the top 5 wealthiest zip codes:

These affluent areas drive up the state’s average household income, with significant disparities between wealthier zip codes and other regions across Wisconsin.

The Bigger Picture

While Wisconsin’s overall median household income of $72,458 might be below the U.S. average, the state’s economic landscape is diverse. Many households enjoy high incomes, particularly in more affluent areas, while the state’s average income still provides a stable foundation for the majority of residents. As the cost of living in Wisconsin remains relatively moderate compared to other states, this income level supports a comfortable lifestyle for many Wisconsin families.

Understanding the state’s income dynamics can help you plan for the future, whether you’re setting up a household budget or exploring potential career opportunities across different regions of Wisconsin.

Wisconsin Tax Brackets

In 2024, Wisconsin maintains a graduated income tax system for individual taxpayers, alongside several other taxes that contribute to the state’s revenue. Below is a comprehensive breakdown of the key tax rates and brackets, including income tax, sales tax, and property tax information for Wisconsin.

Individual Income Tax Rates for 2024

Wisconsin’s state income tax is progressive, meaning that higher income levels are taxed at higher rates. The 2024 income tax rates are as follows:

This system ensures that individuals with lower taxable income pay lower rates, while those with higher income are taxed at a higher percentage.

Corporate Income Tax Rates

Wisconsin’s corporate income tax rate for 2024 is 7.90%, which applies to businesses operating within the state.

Sales and Use Tax Rates

• State Sales Tax Rate: 5.00%
• Average Local Sales Tax Rate: 0.70%
• Combined State and Local Sales Tax Rate: 5.70%

These sales tax rates apply to the purchase of goods and services in Wisconsin. However, 68 counties in Wisconsin impose an additional 0.5% county sales tax, which increases the total sales tax rate in those regions.

Property Tax Rates

Wisconsin has a significant property tax rate of 1.38% of the owner-occupied housing value. This places Wisconsin among the higher property tax states in the U.S. The average property tax collections per capita are $1,782, ranking 24th in the country.

Other Taxes in Wisconsin

• Gasoline Tax: 32.9 cents per gallon (Rank: 20th in the U.S.)
• Cigarette Excise Tax: $2.52 per pack (Rank: 15th in the U.S.)
• Estate and Inheritance Tax: Wisconsin does not impose any estate or inheritance taxes.

Wisconsin’s Tax Collection and Burden

• State and Local Tax Burden: 10.9% (Rank: 37th in the U.S.)
• State and Local Tax Collections Per Capita: $5,700

These metrics reflect the overall burden of taxation on Wisconsin residents, with the state ranking 24th on the State Business Tax Climate Index, indicating a relatively competitive tax environment for businesses.

Example of Wisconsin State Income Tax Calculation for 2024

Consider an individual with a taxable income of $350,000 in 2024. This individual falls into the highest Wisconsin tax bracket of 7.65%, but due to Wisconsin’s progressive tax system, different portions of their income are taxed at different rates.

Here’s the breakdown

• The first $13,810 of income is taxed at 3.54%, totaling $489.
• The next $13,810 to $27,630 is taxed at 4.65%, totaling $643.
• The next $27,630 to $304,170 is taxed at 5.30%, totaling $14,657.
• Finally, the remaining income from $304,170 to $350,000 is taxed at 7.65%, totaling $3,506.

Thus, the individual would pay a total of $19,295 in Wisconsin state income taxes for 2024.

Wisconsin’s tax system is structured to balance the revenue generation needs of the state while maintaining competitive tax rates compared to other U.S. states. With its graduated income tax rates, corporate tax, and various excise taxes, Wisconsin ranks 24th on the State Business Tax Climate Index. Whether you are an individual taxpayer or a business, understanding Wisconsin’s tax brackets and rates can help with financial planning and tax optimization.

Wrapping It Up

Wisconsin’s 2024 tax system, with its graduated income tax rates, corporate tax, sales tax, and property tax, plays a key role in determining take-home pay for both individuals and businesses. Navigating these taxes can be complex, but with the right tools, you can make it easier to manage your finances.

That’s where our Wisconsin Paycheck Calculator comes in handy. It simplifies the process, helping you estimate your take-home pay after taxes, deductions, and withholdings. Whether you’re budgeting for the year ahead or just curious about your paycheck breakdown, our calculator takes the guesswork out of tax planning—so you can focus on what really matters.

Give it a try and get a clearer picture of your finances today!