- On $100,000, Texas leaves you with $4,950 more a year after income tax and payroll withholding.
- The marginal rate on that salary is 27% in Illinois and 22% in Texas.
- The gap is not a fixed percentage — it moves with income, which is why six salaries are shown rather than one.
- Sales tax, property tax and household-specific credits are outside these figures and can outweigh a small gap.
How Illinois and Texas compare
Federal tax is identical in Illinois and Texas, and so is Social Security and Medicare withholding. Everything that differs between these two states is the state layer — which is why a comparison that only quotes the top rates overstates the gap so badly.
On $100,000, Illinois leaves $74,230 and Texas leaves $79,180. That is a difference of $4,950 a year, in favour of Texas. At $40,000 the same pair differs by only $1,980, because most of a smaller salary is taxed in the bands where the two schedules are closest.
The tables above show six salaries because that shape matters more than any single row. A pair that looks nearly level in the middle of the range can separate sharply at the top, once the higher-rate bands finally carry real weight.
How these figures are calculated
Both columns come from one engine call each, at the same salary. It subtracts the federal standard deduction, applies the federal bracket schedule, applies each state’s own schedule and deduction, then subtracts Social Security up to the annual wage base and Medicare on the full amount.
The difference column is a subtraction of those two results, not a rate difference multiplied by a salary. Marginal rates are measured by computing tax at the salary and at the salary plus a small increment, so phase-outs and recapture provisions are captured rather than assumed away.
What is not modelled: sales tax, property tax, local and city income taxes, health premiums and itemized deductions. On a gap this size those can easily be the deciding factor — and in a state with no income tax they are usually where the money is raised instead.
A worked example
At $100,000, the annual difference between Illinois and Texas is $4,950. Spread over 26 pay periods that is a change of a few dozen dollars a check — real, but rarely the largest line in a decision about where to live.
At $40,000 the difference narrows to $1,980, because payroll withholding is a capped or flat amount that weighs on a smaller salary equally in both states. Read the whole table rather than the row nearest your own salary: the trend across it is what tells you whether the gap will widen as your income grows.
Key terms
- Take-home pay
- Salary less income tax and payroll withholding. The amount that reaches your account before benefits or retirement contributions.
- Annual gap
- One state’s take-home pay minus the other’s at the same salary. Positive means the first state named leaves you with more.
- Marginal rate
- The combined federal and state rate on the next dollar earned. What decides the after-tax value of a raise in each state.
- Payroll tax
- Social Security and Medicare. Identical in both states, and Social Security stops at an annual wage base.