The Real Salary Guide to Dearborn, MI: Is $100k Actually Wealth?

Stop looking at the gross number. In Dearborn, the gap between your salary offer and your actual bank deposit is massive. We ran the numbers on a $100,000 salary to see if you're building wealth or just paying the government.

The Verification Test ($100,000 Analysis)

The "Sticker Price" of your labor is $100,000. The "Take Home Pay" is $74,486.

This is a 25.5% deduction rate before you see a dime. Here is the brutal breakdown of where that money went:

• Federal Tax: -$13,614
• FICA (Soc/Med): -$7,650
• State Tax (MI): -$4,250
• Local Tax: -$0

The Reality: You lose roughly $2,126 per month to taxation. The State of Michigan claims $354 of your monthly paycheck. While this is significantly lower than high-tax states like New York or California, it is a tangible hit to your bottom line. If you want to maximize your net worth, you cannot ignore the $4,250 annual loss to the state government.

Smart Budget Breakdown (50/30/20 Rule)

With a monthly net of $6,207, the standard 50/30/20 budgeting rule dictates your spending limits. Here is how it translates to life in Dearborn.

Needs ($3,104/mo) – The Survival Tier

This bucket covers rent, utilities, groceries, and insurance.

• Purchasing Power: Dearborn’s median rent for a 1-bedroom is roughly $1,200 - $1,500.
• The Verdict: You are safe. After paying rent ($1,400) and utilities/car insurance ($400), you still have roughly $1,300 left for groceries and gas. You aren't living paycheck to paycheck in this category.

Savings ($1,241/mo) – The Wealth Engine

This is your financial freedom fund.

• Wealth Creation: With $1,241 monthly, you can fully fund a Roth IRA ($583/mo) and still have $658 left to dump into an index fund.
• The Strategy: This is a strong savings rate (20%). If you maintain this for 5 years, you will have invested $74,460 (excluding market gains). This is where your actual net worth is generated, not in your checking account.

Wants ($1,862/mo) – The Lifestyle Tier

• Discretionary Power: This covers dining out, nightlife, and subscriptions. Dearborn offers a lower cost of entertainment than major metros. You can eat like a king on Ford Road with this budget and still have cash left over.

Dearborn Taxes vs The Competition

Why does Dearborn look attractive? It’s about what you don't pay.

• Dearborn vs. New York City:

  • NYC: On a $100k salary, you’d pay roughly $12,000+ in city and state taxes combined.
  • Dearborn: You pay $4,250 (State) + $0 (Local).
  • Result: You keep an extra ~$7,750 annually by living in Michigan compared to NYC.

• Dearborn vs. Austin, TX:

  • Austin: Has no state income tax, meaning your take-home would be roughly $78,736.
  • Dearborn: Your take-home is $74,486.
  • Result: Texas keeps you $4,250 richer per year. Dearborn is slightly more expensive to exist in tax-wise, but often offers cheaper housing than Austin, balancing the scales.

Frequently Asked Questions (FAQ)

Q: What is the income tax rate in Dearborn?
Dearborn residents pay 4.25% to the State of Michigan. There is no additional local city income tax for residents (though non-residents working in the city may face a tax).

Q: Is $100k a good salary in Dearborn?
Yes. With a take-home pay of $74,486, you are well above the area median household income. You can afford a modern apartment, a car payment, and still save over $1,200 monthly.

Q: Does Dearborn have a local city tax?
No. As of our data analysis for 2026, Dearborn does not levy a tax on residents' income. You only pay the standard Michigan state tax.

Methodology: Calculations based on IRS 2026 Tax Tables (Standard Deduction, Single Filer), FICA rates (7.65%), and Michigan State Comptroller data. Budget recommendations adhere to the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey guidelines.