$100k in Ann Arbor
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📊 Ann Arbor Salary Guide
The Real Salary Guide to Ann Arbor, MI: What $100,000 Actually Buys You
You’ve landed the offer. The headline number is $100,000. In Silicon Valley, that’s a struggle; in the Midwest, it feels like a fortune. But Ann Arbor isn't exactly "average" Midwest. It’s a high-education hub with a cost of living that punches above its weight.
Let’s strip away the hype and run the raw numbers. We’re going to verify your paycheck, break down your budget, and tell you exactly how far that six-figure salary stretches in the home of the Wolverines.
The Verification Test ($100,000 Analysis)
The "Sticker Price" of your salary is a vanity metric. What matters is the liquidity hitting your bank account. Let’s run the audit on a $100,000 gross salary.
- Gross Salary: $100,000
- Federal Tax: -$13,614
- FICA Tax: -$7,650
- State Tax (MI): -$4,250
- Local Tax: $0
The Bottom Line:
Your Take Home Pay is $74,486 annually.
That is a 25.5% effective tax burden. You are losing roughly a quarter of your gross income to taxes before you pay a single bill. On a monthly basis, your ceiling for spending and saving is $6,207.
The Analysis:
Michigan has a flat tax structure. That $4,250 state tax deduction is significant—it’s money that isn't going toward your rent or investments. While not as aggressive as New York City, it is a tangible reduction. If you were banking on the full $100k, you are operating with a nearly $26,000 deficit in your mental budget.
Smart Budget Breakdown (50/30/20 Rule)
With $6,207 hitting your account monthly, the 50/30/20 rule (Needs/Wants/Savings) provides a disciplined framework to manage your wealth.
Needs: $3,104/mo
This is your survival bucket. In Ann Arbor, this number is tight.
Ann Arbor real estate and rental markets are notoriously expensive for the region. The average rent for a one-bedroom apartment hovers between $1,400 and $1,700. Let’s assume you secure a decent unit for $1,500.
- Rent: $1,500
- Utilities/Internet: $200
- Groceries: $400
- Car Insurance/Gas: $300 (Ann Arbor requires a vehicle; public transit is limited)
- Health Insurance Premiums: $704 (Estimated employee contribution)
Total Needs: ~$3,104.
Purchasing Power Verdict: You are breaking even on needs. You can afford a decent apartment and a car, but there is zero margin for error. If your rent exceeds $1,600, you are immediately dipping into your "Wants" or "Savings" categories.
Savings: $1,241/mo
This is your wealth creation engine.
At $1,241/month, you are saving $14,892 annually. This is a strong number. It maxes out a Roth IRA ($7,000 limit) and leaves you with nearly $8,000 to dump into a 401(k) or a brokerage account.
If you can maintain this discipline, you are building a serious portfolio. However, note that this is pre-tax savings potential. If you are aggressive with your 401(k), you lower your taxable income, which is a smart play in a state with a flat income tax.
Wants: $1,862/mo
This is your lifestyle budget.
Ann Arbor is a "college town" with "professional city" prices. A night out in Kerrytown or Main Street isn't cheap. You have roughly $60 a day to spend on discretionary items—dinners, drinks, concerts, and shopping.
- The Reality: This is a comfortable amount for a single person with no kids. You can afford the good breweries, tickets to Michigan football games, and weekend trips to Detroit or Traverse City.
Ann Arbor Taxes vs The Competition
How does the Great Lakes State stack up against the tax heavyweights?
Ann Arbor vs. New York City
If you made $100k in NYC, your take-home pay would be roughly $72,000 (after NY State and NYC local taxes).
- Winner: Ann Arbor. You keep $2,400 more per year in Ann Arbor than in NYC.
Ann Arbor vs. Austin, Texas
Texas has 0% state income tax.
- Austin Take Home: ~$78,000 (roughly $3,500 more than Ann Arbor).
- The Catch: While Texas saves you on income tax, property taxes in Texas are massive (often 1.5%+ of home value). Michigan property taxes are comparatively low (often under 1%).
The Verdict: Ann Arbor sits in the middle of the pack. It’s not a tax haven, but it avoids the predatory taxation of coastal cities.
Frequently Asked Questions (FAQ)
What is the income tax rate in Ann Arbor?
Ann Arbor residents pay a 4.25% flat state income tax to Michigan. There is currently no additional local city income tax levied on residents.
Is $100k a good salary in Ann Arbor?
Yes, but it is not "rich." $100k provides a comfortable lifestyle for a single person or a couple, allowing for savings and hobbies. However, buying a median-priced home in Ann Arbor (often $450k+) on a single $100k income is difficult without a significant down payment or a dual-income household.
Does Ann Arbor have a local city tax?
No. Based on current data, Ann Arbor does not levy a local city income tax on residents. (Note: Commuters who work in other specific cities may be subject to taxes where they work, but Ann Arbor residents are exempt from a local levy).
Disclaimer: This guide utilizes projected 2026 IRS tax brackets for single filers, standard deduction estimates, and FICA rates. State tax data is derived from Michigan Department of Treasury guidelines. Cost of living data is aggregated from Bureau of Labor Statistics (BLS) CPI indices and local real estate market analysis.