Overview
Michigan uses a flat state income tax rate and also has city-level income taxes in certain municipalities (such as Detroit, Grand Rapids, and others). The state’s withholding is straightforward, based on a flat rate minus allowance deductions.
State Income Tax (SIT)
Michigan imposes a flat state income tax rate of 4.25% for 2026. Withholding is calculated by subtracting total allowances (each worth $5,900) from gross wages, then applying the flat rate. There is no standard deduction and no filing status. Michigan also has city income taxes in approximately 24 cities, each with their own rates.
| Tax Structure | Flat rate: 4.25% |
| State Withholding Form | Form MI-W4 |
| Allowance Value | $5,900 per allowance |
| Supplemental Rate | 4.25% |
Setup Note: Approximately 24 Michigan cities levy their own income tax.
Supplemental Wages
Michigan supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 4.25%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 2.7%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 2.7% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Local Taxes: Michigan has city income taxes that may apply depending on the employee’s work and residence location. Be sure to verify which local jurisdictions apply to each employee.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to:
Official reference:Michigan Department of Treasury
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