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The Vermont Paycheck Calculator estimates your take-home pay after federal and Vermont state tax deductions. Vermont uses a graduated income tax system with four brackets ranging from 3.35% to 8.75%. The top marginal rate of 8.75% is among the highest in the nation, placing Vermont alongside states like California, New Jersey, and New York in terms of top-bracket tax burden. Vermont tax system is closely tied to the federal tax code, using federal taxable income as the starting point for state calculations. Vermont does not impose any local or municipal income taxes, so the state graduated rates are the only state-level income tax deductions from your paycheck. This statewide uniformity means that workers in Burlington, Montpelier, Rutland, and every rural community across the state face the same tax bracket structure. The absence of local income taxes provides some simplification compared to states with layered local tax systems. The state offers several credits and deductions that can reduce the effective tax burden. Vermont earned income tax credit is set at 38% of the federal EITC, one of the most generous state EITC rates in the country. Vermont also offers a child and dependent care credit, a renter credit, and various other targeted credits that benefit lower and middle-income workers. Vermont economy is driven by healthcare, education, tourism, agriculture, and a growing technology sector. The state relatively small population and high quality of life attract workers who prioritize lifestyle factors alongside compensation. Understanding the state progressive tax structure is essential for accurately calculating take-home pay, particularly for higher earners who face the 8.75% top bracket.
Net Pay = Gross Pay - Federal Tax - VT State Tax (3.35-8.75%) - FICA (7.65%) - Pre-Tax Deductions
- 1Enter your gross pay amount and select your pay frequency. The calculator annualizes your income to apply the graduated tax brackets correctly, then converts the result back to your per-period withholding amount.
- 2Federal income tax withholding is calculated based on your W-4 filing status and any adjustments or additional withholding amounts you have specified. The calculator applies current federal brackets to determine the per-period federal withholding.
- 3Vermont state income tax is calculated using federal taxable income as the starting point. The state applies its own four-bracket graduated rate structure: 3.35% on the first $45,400 (single), 6.6% from $45,401 to $110,050, 7.6% from $110,051 to $229,550, and 8.75% on income above $229,550.
- 4Vermont-specific credits are applied where eligible, including the earned income tax credit (38% of federal EITC), child and dependent care credit, and other targeted credits. These reduce the net state tax liability.
- 5FICA taxes are calculated: Social Security at 6.2% on earnings up to $168,600 and Medicare at 1.45% on all earnings, with an additional 0.9% Medicare surtax on earnings above $200,000 for single filers.
- 6Pre-tax deductions such as 401(k) contributions, health insurance premiums, HSA contributions, and FSA contributions are subtracted from gross pay before tax calculations, reducing both federal and state taxable income.
- 7The calculator produces your estimated net pay by subtracting all taxes and deductions from your gross pay, with a detailed breakdown showing the contribution of each component.
At $55,000, the worker falls into the second Vermont bracket. The blended effective state rate is approximately 3.92%, which is moderate but adds meaningfully to the federal and FICA deductions.
The 401(k) contribution reduces both federal and Vermont taxable income. The child tax credit at the federal level and Vermont child-related credits further reduce the effective tax burden.
At $300,000, the top bracket of 8.75% applies to approximately $70,450 of income. Combined with the high federal rate and Additional Medicare Tax, the marginal tax rate exceeds 45% on the highest dollars earned.
Vermont generous EITC at 38% of the federal credit significantly reduces the state tax burden for low-income workers with qualifying children, potentially resulting in a refund that exceeds tax owed.
Healthcare workers at the University of Vermont Medical Center and other health systems calculating their take-home pay under Vermont graduated tax system. Healthcare is the state largest employment sector, and workers need to understand how the progressive brackets affect their net earnings at various salary levels.
Education professionals at the University of Vermont, Middlebury College, and the state public school system budgeting their finances. Teacher salaries in Vermont are moderate, and the lower tax brackets (3.35% and 6.6%) apply to most educators, keeping the effective state tax rate manageable.
Tourism and hospitality workers in ski resort towns like Stowe, Killington, and Sugarbush estimating their seasonal and year-round earnings. Many of these workers earn tips that are subject to both federal and Vermont state income tax, and accurate withholding is important for avoiding surprises at tax time.
Remote technology workers who have relocated to Vermont for its quality of life, taking advantage of the state remote worker incentive programs. These workers often earn higher salaries that push them into the upper brackets, making it important to understand the 7.6% and 8.75% rates that apply to higher income levels.
Cross-Border Workers with New Hampshire
Many Vermonters commute to jobs in New Hampshire, particularly in the Upper Valley region near Hanover and Lebanon. Since New Hampshire has no income tax on wages, these workers do not owe New Hampshire tax but must pay Vermont tax on all their income as Vermont residents. There is no credit for taxes paid to another state since no taxes were paid. Conversely, New Hampshire residents working in Vermont are subject to Vermont tax on income earned in the state.
Seasonal Tourism and Agricultural Workers
Vermont significant tourism (skiing, foliage) and agricultural (dairy, maple syrup) industries employ many seasonal workers. These workers may have concentrated earnings in certain months. Vermont tax withholding should be calculated based on annualized income to avoid under or over-withholding. Seasonal workers who earn below the standard deduction threshold may owe little or no Vermont tax.
Remote Workers and the Convenience of Employer Rule
Vermont does not have a convenience of the employer rule like New York. This means remote workers living in Vermont but employed by out-of-state companies are taxed by Vermont as residents, not by the employer state. Workers should ensure their Vermont withholding is set up correctly and that they are not having taxes withheld by both their employer state and Vermont without a corresponding credit.
| Tax Component | Rate | Base/Limit | Notes |
|---|---|---|---|
| VT Bracket 1 | 3.35% | Up to $45,400 (single) | Lowest marginal rate |
| VT Bracket 2 | 6.60% | $45,401-$110,050 (single) | Nearly doubles from bracket 1 |
| VT Bracket 3 | 7.60% | $110,051-$229,550 (single) | Upper-middle bracket |
| VT Bracket 4 | 8.75% | Above $229,550 (single) | Among highest state rates nationally |
| Social Security | 6.2% | Up to $168,600 (2024) | Federal wage base limit |
| Medicare | 1.45% | All earnings | No wage base limit |
| Additional Medicare | 0.9% | Above $200,000 (single) | Federal surtax on high earners |
| Vermont EITC | 38% of federal | Income-based phaseout | One of most generous state EITCs |
What are the Vermont income tax brackets for 2024?
For single filers, Vermont has four brackets: 3.35% on the first $45,400, 6.6% on income from $45,401 to $110,050, 7.6% on income from $110,051 to $229,550, and 8.75% on income above $229,550. Married filing jointly thresholds are approximately double: $75,850, $183,800, $383,250, and above $383,250 respectively.
Does Vermont have local or city income taxes?
No. Vermont does not impose any local, city, or county income taxes. The state graduated income tax is the only income tax deducted from your paycheck. This is a notable advantage over some neighboring states, particularly New York, which imposes significant local taxes in New York City and Yonkers.
How does the Vermont earned income tax credit work?
Vermont EITC is calculated as 38% of your federal earned income tax credit. You must qualify for and claim the federal EITC to receive the Vermont credit. For example, if your federal EITC is $3,000, your Vermont EITC would be $1,140. This is one of the most generous state EITC programs in the nation and can significantly reduce or eliminate state tax liability for lower-income working families.
Does Vermont tax Social Security benefits?
Vermont exempts a significant portion of Social Security benefits from state tax. For tax year 2024 and beyond, Vermont follows the federal treatment of Social Security benefits, meaning that up to 85% of benefits may be taxable depending on total income. However, Vermont offers an exemption for lower-income retirees, and the state has been progressively increasing the exemption thresholds.
How does Vermont compare to New Hampshire for taxes?
Vermont and New Hampshire have dramatically different tax structures. Vermont has a graduated income tax up to 8.75%, while New Hampshire has no tax on wages or salaries. However, Vermont offers more state-funded services, lower property taxes in many areas, and a higher minimum wage. Cross-border workers living in one state and working in the other should carefully evaluate their total tax burden.
Are there any tax incentives for moving to Vermont?
Vermont has offered remote worker relocation incentive programs, providing grants to individuals who move to the state and work remotely for out-of-state employers. The state has also offered new worker relocation grants. These programs change over time, so check with the Vermont Agency of Commerce for current offerings. The incentives can help offset the higher state income tax rates.
Profi-Tipp
If you are a lower or middle-income worker in Vermont, make sure to claim the earned income tax credit on both your federal and Vermont returns. The Vermont EITC at 38% of the federal credit is exceptionally generous and can significantly reduce or even eliminate your state tax liability. Combined with the federal credit, eligible families can receive thousands of dollars in combined credits that far exceed their state tax obligation.
Wussten Sie?
Vermont was the first state to voluntarily join the United States after the original 13 colonies, and it maintains a fiercely independent spirit reflected in its tax policy. Despite having one of the highest top income tax rates in the nation at 8.75%, Vermont also offers one of the most generous earned income tax credits at 38% of the federal amount, creating a tax system that is deliberately progressive and designed to support lower-income working families while asking more from higher earners.