Michigan payroll taxes
Every tax withheld from a Michigan paycheck or paid by the employer in 2026, with rates and wage limits.
Last verified November 2, 2026. Sources: news.bloombergtax.com, taxfoundation.org, oregon.gov.
| Tax | Employee pays | Employer pays | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $184,500 |
| Medicare | 1.45%* | 1.45% | No limit |
| FUTA | — | 0.6% | $7,000 |
| Michigan SUTA | — | 2.7% (new) | $9,000 |
| Michigan income tax | 4.25% | — | — |
*Plus 0.9% Additional Medicare Tax withheld on wages over $200,000. FUTA rate shown is net of the state credit.
State unemployment insurance
Michigan charges new employers 2.7% on the first $9,000 each employee earns in a year. After a few years, the rate is based on the employer's layoff history and ranges from 0.06% to 12.2%. Wage base is $9,500 for delinquent employers. The new construction employer rate is 5%. The maximum rate rose from 10.3% (2025) to 12.2% (2026).
Obligation Assessment may apply (none itemized for 2026)
Register and file with the Michigan unemployment tax agency.
Income tax withholding
Michigan has a flat income tax of 4.25% on taxable income. 24 cities levy income tax: Detroit 2.4% resident / 1.2% nonresident; Grand Rapids 1.5%/0.75%; Saginaw 1.5%; Highland Park 2%; most others 1% resident / 0.5% nonresident
Frequently asked questions
- What payroll taxes do employers pay in Michigan?
- Social Security, Medicare, federal unemployment (FUTA) and Michigan unemployment insurance (SUTA).
- What is the Michigan SUTA wage base for 2026?
- $9,000 per employee.
- Does Michigan require state income tax withholding?
- Yes. Employers withhold Michigan income tax based on the employee's state withholding certificate or federal W-4.