United States (US)
The United States is a federation of 50 states and the District of Columbia spanning six time zones from the Atlantic to the Pacific, plus Alaska and Hawaii.
Tax & Payslip Guide
Understanding your taxes in United States — tax year Calendar year (January 1 – December 31).
📊 Income Tax Brackets
| Income from | Income to | Rate | Notes |
|---|---|---|---|
| 0 | 12,400 | 10% | Federal income tax bracket for single filers, tax year 2026 (IRS Rev. Proc. 2025 inflation adjustments). Applies to taxable income up to $12,400 after the standard deduction ($15,750 single, 2026). Lowest federal marginal rate. |
| 12,401 | 50,400 | 12% | Federal income tax bracket for single filers. Applies to the portion of taxable income between $12,401 and $50,400. |
| 50,401 | 105,700 | 22% | Federal income tax bracket for single filers. Applies to taxable income between $50,401 and $105,700. Most middle-class single earners fall in this band. |
| 105,701 | 201,775 | 24% | Federal income tax bracket for single filers. Applies to taxable income between $105,701 and $201,775. |
| 201,776 | 256,225 | 32% | Federal income tax bracket for single filers. Applies to taxable income between $201,776 and $256,225. |
| 256,226 | 640,600 | 35% | Federal income tax bracket for single filers. Applies to taxable income between $256,226 and $640,600. |
| 640,601 | ∞ | 37% | Top federal income tax bracket for single filers. Applies to taxable income above $640,601. Married filing jointly threshold is approximately double (~$768,600). Does not include the 3.8% Net Investment Income Tax on high earners. |
🏛️ Social Contributions
Funds retirement, disability, and survivor benefits through the Social Security Administration. The $184,500 annual wage base cap (raised from $176,100 in 2025) means no Social Security tax is owed on wages above that amount. Self-employed individuals pay both halves (12.4%) via SECA.
Funds Medicare health insurance for those 65+ and certain disabled individuals. No wage cap. The Additional Medicare Tax of 0.9% on wages above $200,000 (single) / $250,000 (married filing jointly) is employee-only. Self-employed pay both halves (2.9%) plus the 0.9% surcharge where applicable.
Employer-only tax funding federal unemployment compensation administration. Most employers receive a 5.4% credit for timely state unemployment tax payments, leaving an effective 0.6% rate ($42/year per employee maximum).
Nine states have no state income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). California has the highest top rate at 13.3%. New York City and some other cities add municipal income tax. Expats should factor state tax into their total cost — a $150,000 salary in Texas nets meaningfully more than in California.
Employer-funded in most states; employees contribute only in Alaska, New Jersey, and Pennsylvania. Rates vary by employer's claims history (experience rating).
🛒 VAT Rates
The United States has no federal Value Added Tax. Instead, 45 states plus the District of Columbia levy a state sales tax (0%–7.25% at state level), and many localities add a local sales tax (bringing combined rates to 9.5%+ in some cities — Chicago 10.25%, Los Angeles 9.5%, New York City 8.875%). Five states have no state sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon) though some allow local sales tax. Sales tax is added at the register — not included in shelf prices. Groceries, prescriptions, and some necessities are often exempt or taxed at reduced rates.
🧾 Sample Payslip Decoder
🌍 Special Expat Tax Rules
The US taxes based on citizenship and residency, not just source. US citizens and green-card holders must file annual federal tax returns reporting worldwide income regardless of where they live. Americans living abroad can use the Foreign Earned Income Exclusion (FEIE, Form 2555) to exclude up to $132,900 (2026, indexed from $130,000 in 2025) of foreign wages, plus the Foreign Tax Credit (Form 1116) to offset US tax by foreign taxes paid. Non-citizen residents (H-1B, L-1, green card) are taxed as US residents on worldwide income from the date they become tax residents. Tax treaties with 60+ countries can reduce double taxation — consult a cross-border tax professional (e.g., CPA with Enrolled Agent credential) in your first filing year.
📋 Double Tax Treaties
The US has double tax treaties with approximately 65 countries, including the UK, Canada, Germany, France, Japan, South Korea, India, Mexico, and most of Western Europe. Treaties typically provide reduced withholding on dividends, interest, and royalties, and may include tie-breaker rules for tax residency. Key gaps: no treaty with Brazil, Argentina, Singapore, Hong Kong, or the UAE. The saving clause in most US treaties preserves the right to tax US citizens on worldwide income, limiting treaty benefits for Americans.
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