Alaska has no state income tax, so the only money leaving your paycheck for taxes is federal income tax and FICA. There is no Alaska withholding line at all, and the state has no statewide sales tax either.
On top of that, Alaska famously pays residents an annual Permanent Fund Dividend from its oil wealth. Here is what still comes out of an Alaska paycheck, and how the state funds itself. See your exact take-home with the free Alaska paycheck calculator.
How Alaska's income tax works
Alaska is one of nine states with no tax on wage income. Your employer withholds only federal income tax and FICA at 7.65% (6.2% Social Security up to the wage base, plus 1.45% Medicare). There is no state income tax and no statewide sales tax, though some boroughs and cities levy local sales taxes.
Because there is no state income tax, an Alaskan keeps far more of the same salary than a worker in a high-tax Pacific state like Oregon or California.
Your take-home on a $65,000 salary in Alaska
Here is how a $65,000 salary breaks down for a single filer, using 2025 federal and FICA figures alongside Alaska's no state income tax.
| Item | Annual |
|---|---|
| Federal income tax | $5,246 |
| FICA (Social Security + Medicare) | $4,973 |
| Alaska income tax | $0 |
| Take-home pay | $54,782 |
| Percent of gross kept | 84.3% |
On a $65,000 salary a single filer keeps about $54,782, or 84.3% of gross, with no state income tax form to file. Alaska's high cost of living, driven by its remoteness, is the offsetting factor: groceries, fuel, and shipping cost more, especially outside Anchorage. Compare with Oregon.
No income tax, no sales tax, and a yearly dividend
Alaska is unique: it funds its government largely through oil and gas revenue rather than taxing residents. There is no state income tax and no statewide sales tax. The state even pays eligible residents an annual Permanent Fund Dividend (often around $1,000 to $1,700 per person) from its oil-funded sovereign wealth fund.
For retirees the math is excellent: Alaska taxes neither wages nor retirement income such as 401(k), IRA, and pension withdrawals or Social Security, and there is no estate or inheritance tax.
How to keep more of your Alaska paycheck
Even without a state tax to shelter, a traditional 401(k) or HSA still lowers your federal tax, and an HSA also avoids FICA. In a no-income-tax state like Alaska, those accounts are the main remaining lever to push your take-home rate even higher.