Overview of Delaware Taxes
Delaware is known as a tax haven, but even residents of the First State aren’t exempt from taxes. There are seven tax brackets in the state and the highest income tax rate is 6.60%. There are also local income taxes in Wilmington.
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Delaware Paycheck Calculator
Delaware Paycheck Quick Facts
- Delaware income tax rate: 0% - 6.60%
- Median household income: $81,361 (U.S. Census Bureau)
- Number of cities that have local income taxes: 1
How Your Delaware Paycheck Works
When you get paid, your employer takes out income taxes from your paycheck. This includes federal income taxes (which the IRS puts toward your annual income taxes) and FICA taxes (which fund Social Security and Medicare). For Delaware residents, it also includes state income taxes, as well as local taxes for people who live or work in Wilmington. Your employer uses the information you filled out on your W-4 to figure out how much should be withheld from each of your paychecks.
If you haven’t recently, make sure to check your W-4, as the IRS made changes to the form in recent years. The new version doesn’t ask you to list total allowances. Instead of claiming allowances, employees are required to enter dollar amounts for income tax credits, non-wage income, itemized and other deductions and total annual taxable wages. There's also a new five-step process that allows filers to enter personal information, claim dependents and indicate any additional jobs or income. Only those adjusting their withholdings or changing jobs will be affected by these changes, at least for now.
Your marital status is one of many factors that will affect how much is taken out in federal taxes. If you’re single or married and filing separately, your taxes are different than if you decide to file with your spouse or declare that you’re the head of household.
Your employer is also responsible for withholding FICA taxes from your wages. These are Social Security and Medicare taxes, and they are withheld at rates of 6.2% and 1.45% of your wages. The total contributions that the federal government requires to Social Security and Medicare are double that amount, but your employer pays the other half. Any wages that you earn in excess of $200,000 (over $250,000 for joint filers and more than $125,000 for married individuals filing separately) are also subject to a 0.9% Medicare surtax, which employers do not match.
If you are self-employed, you have to pay the self-employment tax, which is equal to the full 12.4% in Social Security taxes and 2.9% in Medicare taxes.
Your marital status doesn’t affect state taxes in Delaware, since the income tax brackets are the same regardless of your filing status. If you make $2,000 or less in taxable income, you don’t have to pay any state taxes. If you make between $2,000 and $5,000 the tax rate is 2.20%; up to $10,000, it’s 3.90%; up to $20,000, it’s 4.80%; up to $25,000, it’s 5.20%; up to $60,000, it’s 5.55%; and over $60,000, it’s 6.60%.
If you live or work in the city of Wilmington, you also have to pay a 1.25% local income tax, also known as the City Wage Tax.
For those considering buying a home in Delaware, our mortgage guide is a great place to start the process of getting a mortgage. With information on rates and the different kinds of loans, this guide puts the mortgage-related info you care about in one place.
A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
How You Can Affect Your Delaware Paycheck
You can take steps to change the size of your Delaware paycheck. If you can afford it, consider saving more in employer-sponsored retirement accounts, such as a 401(k) or 403(b). While the amount of each of your paychecks will go down, so will your taxable income, as that money is contributed to your account before taxes. This may even push you into a lower tax bracket. Depending on what your employer offers, you may also have the option of putting some of your paycheck toward benefits like health or life insurance, a health savings account (HSA) or a flexible spending account (FSA).
You can also ask your employer to simply withhold an additional dollar amount. Say, for example, you want to withhold $50 from each paycheck: Simply write that amount on the correct line on a new W-4 form. It might mean you get a smaller paycheck, but you’ll avoid paying a large lump sum when you file your taxes.
