Montana simplified its income tax in 2024 to just two rates, 4.7% and 5.9%, applied to your federal taxable income. And like only a few states, Montana has no general sales tax at all.
Because the 5.9% rate starts fairly low, most full-time workers pay it on the bulk of their income, but the missing sales tax offsets part of the bite. Here is how it works on your paycheck. See your exact take-home with the free Montana paycheck calculator.
How Montana's income tax works
Montana now uses two brackets: 4.7% up to $21,100 of taxable income and 5.9% above that (single filer). It starts from your federal taxable income, so it uses the federal standard deduction. There is no local income tax. (Montana's old partial federal-tax deduction now applies only to filers 65 and older.)
Because the 5.9% rate begins at about $21,100, a typical worker's marginal rate is 5.9%, though the federal standard deduction keeps the effective rate lower.
| Taxable income | Rate |
|---|---|
| $0 – $21,100 | 4.7% |
| Over $21,100 | 5.9% |
Your take-home on a $65,000 salary in Montana
Here is how a $65,000 salary breaks down for a single filer, using 2025 federal and FICA figures alongside Montana's two rates, 4.7% and 5.9%.
| Item | Annual |
|---|---|
| Federal income tax | $5,246 |
| FICA (Social Security + Medicare) | $4,973 |
| Montana income tax | $2,697 |
| Take-home pay | $52,085 |
| Percent of gross kept | 80.1% |
On a $65,000 salary a single filer owes about $2,697 in Montana income tax, an effective rate near 4.1%, and keeps roughly $52,085, or 80.1% of gross. Montana's lack of any sales tax is a real offset: you pay nothing at the register, which especially helps in tourist-heavy areas like Bozeman, Missoula, and the gateway towns near Glacier and Yellowstone. Compare with Idaho.
No sales tax, and a simpler two-rate system
Montana is one of the few states with no general sales tax, which partly compensates for an income tax whose 5.9% rate arrives fairly early. The trade-off favors people who spend a lot relative to what they earn.
Montana does not tax Social Security for many retirees and recently simplified from a multi-bracket system to two rates, making the tax easier to predict.
How to keep more of your Montana paycheck
Because Montana uses your federal taxable income, a traditional 401(k) and HSA lower your Montana and federal taxable income together (and the HSA also avoids FICA), the simplest way to nudge your take-home higher.