Michigan Salaries Stretch Further than Indiana, but Lag Behind Ohio and Wisconsin, Study Finds

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Article courtesy of ChiefJobs.com

• North Dakota is the state where salaries stretch furthest, with residents keeping 24.2% of their earnings after essential expenses.
• Maryland and Iowa rank second and third overall, as residents keep 20.98% and 19.9% of their salary after essential outgoings each month, respectively.
• Hawaii ranks last, with residents falling $769 short each month after essentials, equal to -12.71% of their earnings.

A new study by ChiefJobs.com has found that North Dakota residents keep more of their salary than people in any other state, with an average of $1,156 left over each month after covering core expenses like taxes, housing, food, healthcare, insurance, communication and car costs.

The research compared average monthly after-tax income with estimated essential expenses in every state. States were then ranked by the percentage of earnings residents have left after these essential costs.

Michigan findings:

Michigan ranks 14th overall for salary stretch, with residents keeping 13.95% of their earnings after essential expenses. The state has a weighted monthly income after tax of $4,552, with $635 left over each month once core costs such as housing, food, healthcare, insurance, communication and car costs are covered.

Within the wider Midwest, Michigan sits behind several neighbouring and regional states. Illinois ranks sixth, while Ohio and Wisconsin share seventh place, with all three seeing residents keep more than 16% of earnings after essentials. Indiana also places slightly lower than Michigan in 17th, with residents keeping 13.39% of earnings, meaning Michigan sits around the middle of the regional pack rather than among the most squeezed states.

Top 10 states where salaries stretch furthest after essential expenses

North Dakota ranks first overall, with residents keeping 24.2% of their earnings after essential expenses. The weighted monthly income after tax is $4,777, with $1,156 left over once core monthly costs are covered.

Maryland takes second place and has the highest disposable monthly income in the top 10. Residents are left with $1,271 after essentials, equal to 20.98% of their earnings.

Iowa ranks third, with residents keeping $930 each month after essential spending. That leaves 19.9% of monthly earnings available after core costs.

South Dakota follows in fourth place, with $939 left over after essentials. This means residents keep 19.45% of their earnings once necessary monthly costs are paid.

Minnesota completes the top five, with residents retaining $962 each month after essential expenses. This accounts for 18.17% of weighted monthly after-tax income.

Illinois ranks sixth, with residents keeping $894 after essentials, or 17.69% of earnings.

Ohio and Wisconsin share seventh place, with both states seeing residents keep 16.12% of earnings after essential costs. Ohio residents are left with $714 each month, while Wisconsin residents keep $770.

Alaska follows in eighth, with residents keeping $923 after essentials, equal to 15.32% of earnings. Virginia ranks ninth, where residents are left with $855 after essential expenses, or 15.16% of earnings.

Nebraska completes the top 10, with residents keeping $698 after essentials, equal to 14.75% of monthly earnings.

Bottom 10 states where salaries struggle most after essential expenses

At the other end of the ranking, Hawaii places last. Despite having a weighted monthly after-tax income of $6,046, residents fall $769 short after essential expenses, equal to -12.71% of earnings.

California ranks second from bottom, with residents also falling into negative disposable income after essentials. The state has a weighted monthly after-tax income of $5,940, but essential costs leave residents $699 (-11.77%) short each month.

Montana places third from bottom, with residents falling $105 short after essential expenses. This means earnings are 2.22% below estimated core monthly costs.

Louisiana ranks fourth from bottom, with residents left $51 short after essentials, equal to -1.35% of earnings.

Florida rounds out the bottom five, with residents left with just $55 after essential costs. This represents only 1.08% of weighted monthly after-tax income.

Rhode Island places sixth from bottom, with residents keeping $158 after essentials, or 3.2% of monthly earnings.

New York follows in seventh from bottom, where residents are left with $216 after essential spending, equal to 4.34% of earnings.

Massachusetts ranks eighth from bottom, with residents keeping $281 after essentials, or 4.64% of monthly income. Nevada places ninth from bottom, with residents left with $287 after essential expenses, equal to 5.6% of earnings. Oregon completes the bottom 10, with residents keeping $296 after essentials, or 5.75% of weighted monthly after-tax income.

Speaking on the findings, Simon Fabb, CEO of ChiefJobs.com, said: “People don’t take home a salary in a vacuum. A bigger salary in a high-cost area can disappear quickly once housing, healthcare, transport and insurance are paid. That’s where some workers can get caught out, especially if they relocate for a role and only compare the pay packet.

“What’s interesting in this ranking is that the states at the top aren’t necessarily the ones people instantly associate with the highest salaries. They are the places where income and everyday costs are better balanced, which can make a huge difference to how financially comfortable someone feels.

“For jobseekers, the key question shouldn’t just be ‘how much will I earn?’ It should be ‘how much will I actually have left?’ That leftover income is what pays for savings, emergencies, debt repayments and, frankly, having a life outside work.

“This is also something employers need to be aware of. If companies want to attract talent across different states, especially for relocation or hybrid roles, they need to understand that a salary that looks competitive in one place may not stretch nearly as far somewhere else.”

Sources:

U.S. Census Bureau

Bureau of Economic Analysis

AHRQ Medical Expenditure Panel Survey

Centers for Medicare & Medicaid Services

ChiefJobs.com internal calculations and analysis

Methodology:

Income data was taken from the U.S. Census Bureau and converted into monthly after-tax income using federal, payroll, and estimated state and local income tax calculations.

Essential expenses, including housing, food, healthcare, insurance, communication and car costs, were calculated using U.S. Census Bureau, Bureau of Economic Analysis, AHRQ and CMS data. Homeowner and renter estimates were calculated separately, then combined using each state’s owner/renter household split.

States were ranked by the percentage of earnings left after essential expenses, with disposable monthly income also calculated for each state.

Full ranking: