South Dakota's Department of Revenue does not hedge. Its page for individuals states that South Dakota is one of seven states that does not impose a state income tax, and then enumerates what an individual actually pays instead: sales and use tax, property tax, motor fuel excise, and tobacco and alcohol taxes.
That list is the whole story. There is no bracket table to record, and none is invented.
A single filer earning $85,000 in South Dakota takes home $68,628.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; South Dakota's position comes from this site's own sourced 50-state dataset, citing the South Dakota Department of Revenue directly. Every dollar figure is computed by the same engine the site's calculators use, on a single filer taking the federal standard deduction with no dependents or pre-tax deferrals unless stated. Sales tax and property tax are discussed qualitatively.
1. What South Dakota takes from a paycheck: nothing
| Amount on $85,000 | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| South Dakota income tax | $0 |
| Take-home | $68,628 |
Across incomes:
| Salary | SD tax | Take-home |
|---|---|---|
| $30,000 | $0 | $25,285 |
| $45,000 | $0 | $38,338 |
| $60,000 | $0 | $50,390 |
| $85,000 | $0 | $68,628 |
| $120,000 | $0 | $93,250 |
| $175,000 | $0 | $130,879 |
No state return on wage income, no withholding line, no brackets.
See what your own salary leaves you in South Dakota2. Filing jointly
The single-filer figures above are the ones most often quoted. Here is the same salary as a married couple's sole income, filing jointly:
| Salary | Single take-home | Joint take-home | Difference |
|---|---|---|---|
| $45,000 | $38,338 | $40,278 | +$1,940 |
| $85,000 | $68,628 | $72,658 | +$4,030 |
| $120,000 | $93,250 | $100,780 | +$7,530 |
| $175,000 | $130,879 | $140,773 | +$9,894 |
All of that difference is federal. In a state with graduated brackets, part of the joint-filing benefit comes from the state widening its own brackets for married couples — Oregon and Minnesota both do. In South Dakota there is no state layer to widen, so the entire gap is the federal standard deduction doubling and the federal brackets widening.
That has one consequence worth naming: the joint-filing benefit is the same dollar amount in South Dakota as in every other no-income-tax state, and smaller than in most taxing states. If you are comparing a move on the strength of filing jointly, the comparison is federal-versus-federal plus whatever the other state adds.
As a share of gross, the total tax rate:
| Salary | Single | Joint |
|---|---|---|
| $45,000 | 14.81% | 10.49% |
| $85,000 | 19.26% | 14.52% |
| $120,000 | 22.29% | 16.02% |
| $175,000 | 25.21% | 19.56% |
These are effective rates, not marginal ones — the share of the whole salary that leaves, not the rate charged on the last dollar. The two get confused constantly, and the effective rate is the one that tells you what you can spend.
3. What the paycheck actually looks like
Annual figures are useful for comparison and useless for budgeting. On $85,000 as a single filer in South Dakota:
| Pay schedule | Gross per cheque | Net per cheque |
|---|---|---|
| Weekly (52) | $1,634.62 | $1,319.76 |
| Biweekly (26) | $3,269.23 | $2,639.52 |
| Semi-monthly (24) | $3,541.67 | $2,859.48 |
| Monthly (12) | $7,083.33 | $5,718.96 |
Biweekly and semi-monthly are not the same thing, and the difference catches people out. Biweekly is 26 cheques a year — every other Friday — so two months in the year contain three paydays. Semi-monthly is 24 cheques, on fixed dates such as the 15th and the last day, so every month contains exactly two.
The annual total is identical. The monthly cash flow is not. A biweekly earner budgeting on "two paycheques a month" is under-counting by two cheques a year, which on $85,000 is $5,279 that arrives in two windfall months and is easy to spend without noticing.
Three more things a real pay stub adds that the table above does not:
Health insurance premiums, if taken pre-tax under a Section 125 plan, come off before tax and reduce FICA wages as well. A $400-a-month premium is $4,800 a year that never appears as taxable income.
Retirement deferrals reduce federal taxable income but not FICA wages, so the saving is your federal rate only.
Withholding is an estimate, not the tax. Your employer withholds based on the W-4 you filed. Over-withholding produces a refund; under-withholding produces a bill. Neither changes what you actually owe, which is what the figures above show.
Because South Dakota withholds nothing at state level, your pay stub has one fewer line than most Americans' and one fewer thing to get wrong. What pays for that is a modest sales tax rate applied to an unusually broad base.
4. No local income tax, confirmed rather than assumed
No South Dakota municipality, county, or school district levies a tax on personal income.
The reasoning is structural. South Dakota's local-option taxing authority runs to sales and use tax — a municipal sales tax and a municipal gross receipts tax — and to property tax. It does not run to income. There is no state income tax for a local surcharge to attach to, and no separate enabling statute creating a standalone municipal income tax.
This is worth confirming rather than assuming, because the neighbouring picture is not uniform: Iowa has school district surtaxes that ride on state income tax liability, and Missouri, two states south, has city earnings taxes. South Dakota has neither.
A South Dakota take-home figure needs no local asterisk.
5. What the zero is worth
| Compared with | Their tax on $85,000 | SD keeps you |
|---|---|---|
| Minnesota | $4,257 | +$4,257 |
| Montana | $3,442 | +$3,442 |
| Nebraska | $2,988 | +$2,988 |
| Iowa | $2,578 | +$2,578 |
| North Dakota | $377 | +$377 |
| Wyoming | $0 | $0 |
North Dakota is the instructive one. It taxes income, but so lightly at this level — $377 on $85,000 — that the border effect is close to nil. North Dakota's brackets start at a low rate above a large zero band, and a single filer on $45,000 owes nothing at all there.
So "cross into South Dakota and stop paying income tax" is a much bigger deal on the Minnesota border than on the North Dakota one.
Scaling:
| Salary | vs. Minnesota | vs. Iowa | vs. North Dakota |
|---|---|---|---|
| $45,000 | $1,589 | $1,058 | $0 |
| $85,000 | $4,257 | $2,578 | $377 |
| $175,000 | $10,904 | $5,998 | $2,132 |
Minnesota is where this matters. Sioux Falls sits close enough to the Minnesota line, and Minnesota's rates are high enough, that the gap is a genuine factor in where people live and where employers site offices. $4,257 a year is $355 a month at $85,000, and $10,904 — $909 a month — at $175,000.
6. What South Dakota charges instead: a broad sales tax
South Dakota's sales tax rate is not remarkable. Its base is.
Most states carve large exemptions out of their sales tax: groceries, most services, prescription drugs, clothing in some cases. South Dakota exempts far less.
Groceries are taxable. Food for home consumption is subject to sales tax in South Dakota, without the reduced-rate treatment some states apply. That is a meaningful everyday cost, and it falls hardest on households spending most of what they earn.
Services are broadly taxable. This is the bigger structural difference. South Dakota taxes a wide range of services that most states leave untouched — professional, personal and business services alike. A state that taxes services captures a growing share of a modern economy that a goods-only sales tax misses entirely.
The consequence: a modest rate applied to a very wide base raises real money, and it means the effective sales tax burden on a South Dakota household is higher than the headline rate comparison with other states would suggest. Comparing South Dakota's rate to a state with a higher rate but a narrow base can point the wrong way.
The municipal gross receipts tax
On top of the general sales tax, South Dakota municipalities may levy a municipal gross receipts tax on a specific set of categories: lodging, prepared food and beverages, alcoholic beverages, and admissions to entertainment.
Two things follow. For a resident, it raises the cost of eating out and going out specifically, rather than of everything. For the state, it is a targeted way to capture spending by visitors — a mechanism aimed squarely at Black Hills tourism and at Sturgis.
It is not a general local income or sales surcharge. It applies to those enumerated categories.
The credit card industry is a South Dakota story
It is worth a paragraph because it explains part of why the state's finances work without an income tax.
In 1981 South Dakota removed its interest rate cap on consumer loans, and Citibank moved its credit card operation to Sioux Falls shortly afterward. Other issuers followed. The result is that a state of under a million people hosts a very large concentration of national credit card banking, and the bank franchise tax on those institutions is a meaningful revenue line.
It is also why South Dakota's employment base in Sioux Falls skews toward financial services in a way that a Great Plains agricultural state otherwise would not. If you are moving there for work, that is the sector most likely to be hiring at the salaries this article models.
And it is a reminder that "no income tax" is a whole revenue structure, not a single missing line. South Dakota's zero is supported by a broad sales tax, a real property tax, bank franchise revenue, and a small population to spend it on. Change any of those and the arithmetic changes.
7. Property tax carries a real share
South Dakota's effective property tax rates sit near the upper-middle nationally — higher than Nevada's or Tennessee's, lower than Texas's or New Hampshire's.
For a homeowner, that is the part of the trade to model. The income tax saving against Minnesota at $85,000 is $4,257. Property tax on a comparable home may not be lower in South Dakota than in Minnesota, and in some counties may be higher. Run both figures rather than assuming the no-income-tax state wins on total tax.
For a renter, the calculation is cleaner. No income tax, no direct property tax bill, and sales tax as the main offset.
Agricultural land is assessed on productivity rather than market value, a South Dakota-specific approach that matters a great deal to farm households and not at all to someone renting in Sioux Falls.
8. The federal share
| Amount | Share of gross | |
|---|---|---|
| Federal income tax | $9,870 | 11.61% |
| FICA | $6,503 | 7.65% |
| SD income tax | $0 | 0% |
| Total | $16,373 | 19.26% |
FICA still starts at the first dollar
Someone earning $12,000 in South Dakota owes no federal income tax and still pays $918 in Social Security and Medicare. Add sales tax on their groceries — which South Dakota taxes — and the claim that a low earner in a no-income-tax state pays nothing is wrong on both counts.
This is the specific way South Dakota's structure is regressive: the broad base means low-income households pay sales tax on nearly everything they buy, and buying nearly everything they earn is what defines them.
9. Retirees
South Dakota taxes no retirement income of any kind. Social Security, pensions, 401(k) and IRA distributions, interest and dividends are all untaxed. There is no estate or inheritance tax.
For a retiree drawing $70,000 from a mix of sources, that is a complete exemption, and South Dakota consistently ranks among the most tax-friendly states for retirees on the income side.
Two offsets. Sales tax on groceries reaches a retiree's spending directly. And property tax on a paid-off house continues regardless of income — the recurring problem for retirees in states that replaced income tax with property tax, though South Dakota leans on property tax less heavily than Texas or New Hampshire do.
South Dakota also offers property tax relief programmes for elderly and disabled homeowners, administered at county level and subject to income and value limits. Worth checking against your own figures rather than assuming.
10. What you can still control
Every lever is federal.
Pre-tax deferrals save your federal rate only. A $10,000 traditional 401(k) contribution saves an $85,000 earner $2,200 federally. The same deferral in Minnesota would save several hundred more in state tax. Tax-deferred saving is worth less in South Dakota — still worth doing, and the total benefit is smaller.
HSA contributions through payroll cut FICA as well as federal income tax. That 7.65% saving does not depend on a state income tax existing, so it represents a larger share of the total benefit here than in a taxing state.
Roth versus traditional loses its state-tax argument. No rate to deduct against now, none to pay later.
And a South Dakota-specific point about the sales tax: because the base is broad, the household lever that actually reduces South Dakota tax is spending less, not earning differently. That is an unusual thing for a tax article to say, and it is the honest implication of a consumption-tax state.
11. Working across a state line
If you live in South Dakota and physically work in Minnesota, Iowa, Nebraska or Montana, that state generally taxes the income as nonresident source income. South Dakota offers no credit, because South Dakota levies nothing to credit against — so you bear the other state's tax in full. Living in Sioux Falls does not make Minnesota income tax-free.
If you live in South Dakota and work remotely for an out-of-state employer, income is generally sourced where the work is performed, so a South Dakota desk usually means no state income tax. Check whether the employer's state applies a convenience-of-the-employer rule.
If you live in Minnesota and work in South Dakota, Minnesota taxes you. South Dakota's zero does not follow you home.
Reciprocity agreements exist between some neighbouring states and change which state you file in, though not usually which one ultimately taxes you. Check the specific pair rather than assuming.
12. Moving to South Dakota
The income tax saving is real against Minnesota and meaningful against Nebraska and Iowa. It is close to nothing against North Dakota at ordinary incomes, and exactly nothing against Wyoming.
Model the sales tax against your actual spending, including groceries and including services. The broad base means the effective rate on your household is closer to the headline rate than in most states, where large exemptions dilute it.
Run the property tax on the specific house. South Dakota's rates are not low, and this is the item most likely to erode the saving for a homeowner.
Housing costs are a genuine advantage in most of the state, and the main reason the overall arithmetic tends to work out favourably even after sales and property tax.
Frequently asked questions
Does South Dakota have a state income tax? No. The South Dakota Department of Revenue states that South Dakota is one of seven states that does not impose a state income tax. There are no brackets, no rate and no return on wage income.
What is take-home pay on $85,000 in South Dakota? $68,628 for a single filer taking the standard deduction, after $9,870 federal income tax and $6,503 FICA.
Can a South Dakota city or county tax my income? No. Local taxing authority runs to sales and use tax — including a municipal sales tax and a municipal gross receipts tax — and to property tax. It does not extend to income.
How much does South Dakota save me against Minnesota? $4,257 a year at $85,000 and $10,904 at $175,000. Against Iowa it is $2,578 and $5,998. Against North Dakota it is only $377 at $85,000, and nothing at $45,000.
What does South Dakota charge instead? Sales tax at a modest rate on an unusually broad base — groceries are taxable and a wide range of services are too. Municipalities may also levy a gross receipts tax on lodging, prepared food, alcohol and admissions. Property tax carries a real share as well.
Are groceries taxed in South Dakota? Yes. Food for home consumption is subject to sales tax, without the reduced-rate treatment some states apply.
Does South Dakota tax retirement income? No — Social Security, pensions, 401(k) and IRA distributions and investment income are all untaxed, and there is no estate or inheritance tax. Sales tax on groceries and ongoing property tax are the offsets.
I live in South Dakota and work in Minnesota — do I pay Minnesota tax? Generally yes, as nonresident source income. South Dakota has no tax to credit it against, so you bear the Minnesota tax in full.
What to do next
South Dakota's paycheck answer is a clean zero with no local layer. The work is in the sales tax base, which is wider than the rate comparison suggests, and in the property tax on the specific house.
- South Dakota take-home pay calculator — your salary with every federal deduction shown separately.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in Iowa — the neighbour with school district surtaxes on top.
- South Dakota mortgage calculator — where the property tax line does the work.
- 50/30/20 budget calculator — built on take-home rather than salary.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer taking the federal standard deduction with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; South Dakota's position from this site's sourced 50-state dataset, citing the South Dakota Department of Revenue. Sales tax, the municipal gross receipts tax and property tax are discussed qualitatively rather than computed. This is general education and not tax advice; consult a licensed tax professional for your own situation.