Quick answer: Detroit charges 2.4% city income tax to residents on all their wages, wherever they work, and 1.2% to non-residents on wages for work done inside Detroit. Each exemption you claim reduces taxable income by $600. City tax is on top of Michigan's flat 4.25% state income tax.
Who has to pay
| You |
Detroit tax on wages |
| Live in Detroit, work anywhere |
2.4% of all wages |
| Live outside Detroit, work in Detroit |
1.2% of wages for work done in Detroit |
| Live outside Detroit, work fully remote outside Detroit |
None |
| Live and work outside Detroit |
None |
Non-residents who split time between a Detroit office and home outside the city pay only on the Detroit share of their work. They allocate wages on the non-resident return using the days worked in and out of the city.
How much: worked examples
All examples use one $600 exemption.
Resident earning $60,000: ($60,000 − $600) × 2.4% = $1,425.60 a year, about $54.83 per biweekly paycheck.
Non-resident earning $60,000, working full time in Detroit: ($60,000 − $600) × 1.2% = $712.80 a year.
Non-resident earning $60,000, in the Detroit office 3 days a week: Detroit wages are about $36,000, so (about $36,000 − $600) × 1.2% ≈ $425 a year.
For the full picture including federal and Michigan tax, use the Detroit income tax calculator.
What income is taxed
Detroit taxes wages, salaries, bonuses and commissions. Like other Michigan cities, it taxes wages before 401(k) contributions, so a 401(k) doesn't lower city tax even though it lowers federal and Michigan tax. Social Security benefits and most pensions are not taxed by the city.
Who collects it
Since 2015, the Michigan Department of Treasury has administered Detroit's individual income tax for the city. Detroit residents file a city resident return and non-residents file a non-resident return, both through Treasury, usually by the same April deadline as the state return.
Withholding from your paycheck
Employers withhold Detroit tax at 2.4% for residents and 1.2% for non-residents working in the city, after the exemption allowance. If you live in Detroit but work for an employer that doesn't withhold Detroit tax, you'll owe it when you file, and may need to make estimated payments during the year.
If you live in another city that taxes income
If you live in Detroit and work in another Michigan city that taxes non-residents, the combined withholding is adjusted so you're not taxed twice on the same wages. Detroit's withholding guide sets the Detroit rate by subtracting the other city's non-resident rate from 2.4%.
See Michigan cities with income tax for the other 23 cities and their rates.
Detroit city tax next to Michigan state tax
For an $80,000 salary with one exemption:
|
Detroit resident |
Commuter, all work in Detroit |
Suburban, fully remote |
| Michigan income tax (4.25% after $5,900 exemption) |
$3,149.25 |
$3,149.25 |
$3,149.25 |
| Detroit city tax |
$1,905.60 |
$952.80 |
$0 |
| Combined state and city |
$5,054.85 |
$4,102.05 |
$3,149.25 |
The state tax is the same wherever you live in Michigan. The city layer is what changes.
Exemptions: how many to claim
Each exemption is worth $600 for Detroit tax and $5,900 for Michigan tax in 2026. You can usually claim one for yourself, one for your spouse if filing jointly, and one for each dependent. A Detroit resident earning $60,000 who claims two exemptions pays ($60,000 − $1,200) × 2.4% = $1,411.20, compared with $1,425.60 with one. The city exemption is small, so it changes city tax only a little.
Claim exemptions on Form DW-4 for city withholding and MI-W4 for state withholding.
Moving into or out of Detroit
In the year you move, you're a part-year resident. Income earned while you lived in Detroit is taxed at 2.4%. Income earned before or after, for work done in Detroit, is taxed at 1.2%. Income earned outside the city while you lived elsewhere isn't taxed by Detroit at all. Detroit has a separate part-year resident return for this.
Common mistakes
Assuming the suburbs mean no Detroit tax. If you commute into a Detroit office, the 1.2% non-resident tax applies to those days.
Not allocating remote days. Non-residents who work some days from home outside Detroit should allocate wages on the non-resident return. Otherwise they may overpay.
Forgetting estimated payments. Detroit residents whose employer is outside the city often have no city tax withheld. If you'll owe more than a small amount, make quarterly estimated payments to avoid penalties.
Using last year's exemption amount. The Michigan exemption rises with inflation. For 2026 it is $5,900.
Quick checklist for Detroit workers
- Confirm your residency with payroll, especially after a move.
- File a DW-4 so the right rate and exemptions are used.
- Track office days if you're a non-resident with a hybrid schedule.
- Check your W-2 local boxes: local wages and Detroit tax withheld should match your status.
- File your city return each year, resident or non-resident, by the deadline in the Treasury instructions.