How a Maryland paycheck works
Maryland charges two income taxes on the same wage: a state tax on a graduated schedule, and a county tax set by where you live. Both start from the same figure. Your employer annualises your pay, subtracts a standard deduction allowance, subtracts an amount for each exemption you claimed on Form MW507, and what is left is Maryland taxable income. The state schedule runs on it, and your county's rate runs on it too.
On a real Maryland payslip the two appear added together under a single heading, so you will not usually see them split. This page separates them, because the county part is the piece that changes when you move and it is worth seeing on its own.
Federal income tax withholding
Federal withholding annualises the wage, subtracts the standard deduction that matches the filing status on Form W-4 Step 1, applies the graduated schedule for that status, and deducts the dependent credit from Step 3. This page models a W-4 with Steps 2 and 4 left blank: one job, no spouse income, no other income, no extra withholding. Above the income limit for the status, the dependent credit tapers by a set amount for every thousand dollars of excess rather than disappearing at a cliff.
Social Security and Medicare
Social Security applies a flat rate to wages up to an annual ceiling that is re-indexed each year, so it stops partway through the year for a high earner. Medicare applies to every dollar, and above a fixed wage threshold the employer withholds the Additional Medicare tax on the excess, with no employer match and no regard for filing status.
Your county is where you live, not where you work
Every Maryland county levies the tax, and so does Baltimore City, which counts as its own jurisdiction for this purpose. The rate that applies is the one for the address on your Form MW507 — your residence — not the place you commute to. Someone living in one county and working in another pays their home county's rate, and a pay rise does not change that.
The spread across the state is wide enough to matter on a salary. Two identical offers, one in a low-rate county and one in a high-rate county, leave noticeably different amounts in your pocket, and the gap grows with income because the county tax has no ceiling. If you file no withholding certificate at all, Maryland taxes you at the highest county rate until you do. This calculator starts you on the most populous county instead, because that is the more useful default to see first — pick your own from the list.
Rates move. Maryland reissues the list each year and names the counties that changed, so a payslip and this page can disagree for a while after a change.
Two counties do it differently
Most counties apply a single flat rate to your Maryland taxable income. Two do not, and they do not even differ in the same way.
Anne Arundel uses a graduated schedule, like the state's own: a lower rate on the first slice of taxable income, a middle rate on the next, and the top rate only on what exceeds a high threshold. Crossing a boundary only changes the rate on the income above it, so nothing jumps.
Frederick is the one to watch. It picks one rate according to which band your taxable income falls in, and applies that rate to the whole of it. Cross a band edge by a single dollar and the rate on every dollar goes up. The result is a genuine step: a small raise near an edge can leave you with less money than before. The calculator warns you when your salary is close to one.
Both counties' thresholds differ between filing statuses, so a married couple filing jointly reaches each edge at a higher income than a single filer.
Form MW507 and the two deductions
Two things come off before either tax. One is a standard deduction allowance, a fixed annual amount that everyone gets. The other is an amount for each exemption you claim on Form MW507. Because both come off before the county tax as well as the state tax, an exemption is worth the state rate plus your county rate — so it saves more in a high-rate county.
Maryland asks you to reduce the number of exemptions you claim once your income passes a threshold, rather than adjusting the value of each one. That phase-out happens on the form, in the number you write down, so the calculator takes the count you give it at face value.
Two thresholds worth knowing
Maryland withholds nothing at all below a low annual wage, and when you cross it withholding starts at its full amount rather than easing in from zero. That is another step, and the calculator warns at it — but only when there is something to withhold on the far side. Claim even one exemption and the standard deduction allowance plus that exemption already cover the whole of that wage, so tax is zero on both sides of the line and nothing jumps.
At the other end, Maryland forbids employers from withholding at a rate below the level of its main bracket, even though the annual return has lower brackets beneath it. So the lowest state rate you will ever see withheld is higher than the lowest rate in the tax law. On a modest salary that means slightly more is withheld than the return will finally charge, and the difference comes back as a refund.
What the employer pays on top
The employer matches Social Security and Medicare and pays federal unemployment tax at its net rate. Maryland unemployment insurance is charged to the employer at a rate set from its own claims record on a state wage base, so it is left out. There is no employee-side state levy modelled here.
What this calculator assumes
The figure models a salaried employee paid evenly across the year with a standard Form W-4 and Form MW507, and no pre-tax deductions. It leaves out:
- Pre-tax contributions such as a 401(k), health premiums, HSA or flexible spending accounts, which reduce the wages subject to income tax and often to FICA.
- Extra withholding requested on the federal or state certificate, and the W-4 Step 2 and Step 4 adjustments.
- The reduced rate for a Maryland resident working in Delaware or another state without a reciprocal agreement, which Maryland publishes as a separate table.
- Nonresidents, who pay an extra state amount instead of a county rate.
- Bonuses and other supplemental wages, and lump-sum annual bonuses, which Maryland withholds at its top combined rate.
- Employer-side state unemployment insurance, which is priced per employer, and any federal unemployment credit reduction.
- Employees outside the normal Social Security system, such as some public-sector staff and certain visa holders.
Withholding versus your final tax bill
Withholding is a prepayment. The annual returns, federal and state, replace these standard assumptions with your real situation: itemised deductions, other income, and credits payroll knows nothing about. One job usually produces a refund; two jobs, a working spouse or investment income often produce a balance due.