North Dakota has one of the lowest state income tax rates in the nation, with a progressive system ranging from 0% to 2.5%. Most workers pay little to no state income tax thanks to generous exemptions.
North Dakota Tax Brackets (2026)
| Taxable Income (Single) | Tax Rate |
|---|---|
| $0 - $44,725 | 0% |
| $44,725 - $225,975 | 1.95% |
| $225,975+ | 2.5% |
North Dakota's 0% bracket means many workers pay no state income tax at all. These figures are based on North Dakota Office of State Tax Commissioner guidelines.
What You'll See on Your Paystub
A North Dakota worker's paystub includes both federal income tax withholding and state deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| North Dakota State Income Tax | 0% - 2.5% | Based on income level |
Effective Tax Rate
Because of the 0% bracket on the first $44,725 of income, most North Dakota workers have very low effective tax rates:
| Annual Income | State Tax Owed | Effective Rate |
|---|---|---|
| $40,000 | $0 | 0% |
| $60,000 | ~$298 | ~0.5% |
| $75,000 | ~$590 | ~0.8% |
| $100,000 | ~$1,078 | ~1.1% |
North Dakota's effective tax rates are among the lowest in the nation for states with an income tax—close to having no income tax at all for most workers.
No Local Income Taxes
North Dakota does not allow cities or counties to impose local income taxes. Your state withholding covers all North Dakota income tax obligations.
Oil Industry Workers
North Dakota's oil industry brings special considerations:
- Many oil field workers earn high wages that may push them into the 1.95% or 2.5% brackets
- Per diem and travel allowances are common
- Some workers maintain residency in other states while working in North Dakota
If you work in North Dakota but are a resident of another state, you may owe taxes to both states. Check reciprocity agreements and consult a tax professional.
North Dakota vs. Neighboring States
| State | Tax Structure | Top Rate |
|---|---|---|
| North Dakota | Progressive | 2.5% |
| South Dakota | None | 0% |
| Montana | Progressive | 5.9% |
| Minnesota | Progressive | 9.85% |
Comparing Take-Home Pay
Here's how a $75,000 annual salary in North Dakota compares to other states:
| State | Effective Rate | Annual State Tax |
|---|---|---|
| North Dakota | ~0.8% | ~$590 |
| South Dakota | 0% | $0 |
| Minnesota | ~5.5% | ~$3,600 |