State income tax and your take-home pay after moving
State income tax is the most commonly overlooked variable in relocation math. For a $150,000 earner, moving from California to Texas can be worth $12,000+ per year in additional take-home — even after accounting for cost-of-living differences.
Last updated June 2026
Why state income tax matters for relocation
The RPP-based equivalent salary formula tells you how much you need to maintain purchasing power. But purchasing power is based on net income — what you keep after taxes.
If you earn $150,000 in California and move to Texas, you get the same gross salary but keep significantly more. California's income tax on $150,000 is approximately $12,000-$15,000. In Texas: $0. That is real spending power, not hypothetical.
Tax rate snapshot by state type
These are approximate effective rates for a single filer earning $100,000 (2024-2025):
- No income tax: Texas, Florida, Nevada, Washington, etc. — 0%
- Low flat/low bracket states: North Carolina (4.75%), Arizona (2.5%), Pennsylvania (3.07%) — 2.5-5%
- Moderate states: Colorado (4.4%), Georgia (5.49%), Illinois (4.95%) — 4-6%
- High-tax states: New York (~6-7% effective), Massachusetts (5% flat), New Jersey (6-7%) — 5-8%
- Highest-tax states: California (~7-9% effective at $100k), Hawaii (~7-9%) — 7-10%+
The combined calculation: RPP + tax
To get a complete picture of whether a job offer in a new city is financially better, you need to run two adjustments:
- RPP adjustment: Salary x (destination RPP / origin RPP) = equivalent gross salary needed
- Tax adjustment: Compare after-tax income in both locations at the respective salaries
Example: $120,000 in Seattle (RPP 113) vs. $100,000 offer in Austin (RPP 95)
Step 1: RPP equivalent of $120,000 Seattle in Austin = $120,000 x (95/113) = $100,885.
So a $100,000 Austin salary is nearly equivalent in purchasing power. But:
Step 2: Tax adjustment. Washington (Seattle) has no income tax. Texas (Austin) also has no income tax. In this case, the tax difference is zero, and the RPP comparison alone is sufficient.
Example: $120,000 in San Francisco (RPP 130) vs. $95,000 offer in Phoenix (RPP 96)
Step 1: RPP equivalent of $120,000 SF in Phoenix = $120,000 x (96/130) = $88,615.
The $95,000 Phoenix offer exceeds the RPP break-even of $88,615 — it is a real pay increase.
Step 2: California income tax on $120,000 is approximately $8,500. Arizona income tax on $95,000 is approximately $2,375 (at 2.5% flat rate). After-tax differential: you save approximately $6,125/year in state income tax by moving. The Phoenix offer is substantially better in total.
Property tax offset
No-income-tax states often have higher property taxes. Texas property taxes average 1.7-2.2% of assessed value per year — significantly higher than California (capped at 1% plus local additions). On a $400,000 home, that is $6,800-$8,800/year vs. California's roughly $4,500-$5,500. If you own a home, factor property taxes into your comparison.
Use our city profiles to see state income tax notes for each metro, and our comparison tool to calculate the RPP-equivalent salary.
Frequently asked questions
Which states have no income tax?
As of 2025: Alaska, Florida, Nevada, New Hampshire (interest and dividends only), South Dakota, Tennessee, Texas, Washington, and Wyoming. Note that Washington taxes capital gains above $262,000 (2024).
Does moving to a no-income-tax state really save money?
For most earners, yes — but the benefit varies by income level. At $60,000, California's income tax is around $3,500; at $200,000, it's over $20,000. High-property-tax states like Texas partially offset the savings, especially if you own a home.
What is the difference between marginal and effective tax rates?
The marginal rate is the rate on your last dollar of income. The effective rate is the average rate across all your income. For planning purposes, use the effective rate to compare net pay between states.
Keep reading
Stay updated on relocation data
Occasional updates when we verify new metros or key data changes. No spam. Unsubscribe anytime.