ALASKA PAYCHECK CALCULATOR
Alaska is the only state that pays its residents just for living there. The Permanent Fund Dividend, funded by decades of oil revenue, sits alongside zero state income tax and zero statewide sales tax, and for 2026 it lands at $1,200 per eligible resident after lawmakers signed off on a $1,000 base dividend plus a $200 energy relief payment in June.
A paycheck in Alaska still gets trimmed by federal income tax, Social Security, and Medicare, same as anywhere else. What’s different is what’s missing: no state withholding line at all. Instead, Alaska is one of the rare states that pulls a small unemployment insurance contribution directly from employee wages, something you won’t see in most of the country. Curious how this compares elsewhere? Check the calculators for Texas, Florida, Washington, and Wyoming.
Calculate Your Take-Home Pay
Estimate only. Does not include local sales tax, pre-tax deductions like 401(k) or health insurance, or the Permanent Fund Dividend, which is paid separately each October and is not part of a regular paycheck. Consult a tax professional for exact figures.
Every Deduction on an Alaska Paycheck
- Federal income tax: Withheld based on your W-4 and the 2026 IRS brackets, which run from 10% to 37% depending on taxable income and filing status.
- Social Security tax: A flat 6.2% on wages up to $184,500 for 2026, capping out at $11,439 for the year.
- Medicare tax: 1.45% on all wages with no cap, plus an extra 0.9% once you cross $200,000 as a single or head of household filer, or $250,000 filing jointly.
- Alaska state income tax: None. There is no state withholding line on an Alaska paycheck.
- Alaska employee unemployment insurance tax: 0.50% of wages up to a $54,200 wage base for 2026, maxing out at $271 for the year. Alaska is one of only a few states that requires this from employees rather than employers alone.
- Local sales tax (not payroll, but worth knowing): Charged at the point of sale in many cities and boroughs, not withheld from your paycheck.
Why Alaska Has No Income Tax
Alaska repealed its personal income tax back in 1980, right as oil production from the Trans-Alaska Pipeline was ramping up state revenue. Instead of taxing residents, the state built the Alaska Permanent Fund, a sovereign wealth fund that now holds tens of billions of dollars in assets, and began distributing a share of its investment earnings to residents every year starting in 1982.
That dividend has swung wildly depending on oil prices, fund performance, and how much the legislature decides to appropriate in a given year. Recent history shows just how much it moves:
Alaska Permanent Fund Dividend, Recent Years
| Year | Dividend Amount |
|---|---|
| 2023 | $1,312 |
| 2024 | $1,702 |
| 2025 | $1,000 |
| 2026 | $1,200 ($1,000 base + $200 energy relief) |
The 2026 figure came out of a tense budget fight in Juneau. Governor Mike Dunleavy had floated a much larger statutory dividend earlier in the year, but the final $13.9 billion operating budget, worked out by a House-Senate conference committee, settled on the $1,000 base dividend plus a separate $200 energy relief payment instead. The dividend itself is exempt from Alaska tax for the obvious reason that Alaska doesn’t tax income, but the IRS counts it as taxable federal income the year you receive it.
Alaska vs Other No-Income-Tax States at $70,000 (Single)
| State | State Income Tax Owed | Estimated Net Pay |
|---|---|---|
| Alaska | $0 | $57,804 |
| Texas | $0 | $58,075 |
| Florida | $0 | $58,075 |
| Washington | $0 | $58,075 |
All four states charge zero state income tax on a regular paycheck, so the gap here comes down to Alaska’s employee-paid unemployment insurance contribution, about $271 a year at this income level, which the other three states don’t have. What this table can’t show is the $1,200 Permanent Fund Dividend, paid separately each October to eligible Alaska residents, something none of the other three states offer in any form.
Alaska’s Tax Trade-Offs
| Category | Alaska | National Average |
|---|---|---|
| State income tax | None | Varies by state |
| Statewide sales tax | None (local only, avg 1.82%) | ~7.0% combined |
| Effective property tax rate | 0.94% | ~1.0% |
| Estate/inheritance tax | None | Varies by state |
| Tax Foundation 2026 ranking | 4th overall | N/A |
Alaska scores near the top of nearly every tax-friendliness ranking, and the property tax number backs that up: it sits close to the national average rather than being unusually high, despite Alaska’s reputation as an expensive place to live. The real cost most residents feel isn’t taxes at all. It’s the price of shipping goods to a state with limited road access, which shows up in everything from groceries to heating fuel, especially outside Anchorage and the road system.
Local Sales Tax by City
Because there’s no statewide sales tax, what you pay at checkout depends entirely on where you’re shopping. Anchorage, the state’s largest city, charges no local sales tax at all, which is unusual for a city of its size anywhere in the country. Other cities and boroughs set their own rates independently:
| City | Local Sales Tax Rate |
|---|---|
| Anchorage | 0% |
| Juneau | ~5% |
| Fairbanks (city limits) | 0% |
| Sitka | ~5% |
| Kodiak | ~6% |
| Wasilla | ~2.5% |
Some smaller municipalities charge rates up to 7.5%, and a handful even waive sales tax seasonally on certain goods. Always check the specific city or borough rate rather than assuming a statewide figure, because there isn’t one.
Retirees and Remote Workers in Alaska
Retirees in Alaska keep every dollar of Social Security, pension income, and retirement account withdrawals free from state tax, since none of it is taxed at the state level to begin with. Combined with a property tax rate close to the national average and, for long-term residents, an annual Permanent Fund Dividend, Alaska ranks well on paper for retirement tax planning. The catch is the same one everyone runs into: heating costs, food shipped long distances, and healthcare access outside the larger cities can offset a chunk of what the state doesn’t tax.
Remote workers considering a move purely for tax reasons should run the full math first. A six-figure remote salary from an out-of-state employer sees no state income tax savings if that employer is already based in a no-tax state, and the cost-of-living gap in Alaska, particularly for housing and fuel, can outweigh the benefit unless the move is also a lifestyle choice.
Federal Tax Bracket Example: $70,000 Single Filer
Start with $70,000 in gross wages. Subtract the 2026 federal standard deduction of $16,100, leaving $53,900 in taxable income. Here’s how the brackets apply:
- 10% on the first $12,400 = $1,240
- 12% on the next $38,000 (from $12,400 to $50,400) = $4,560
- 22% on the remaining $3,500 (from $50,400 to $53,900) = $770
Total federal tax: $6,570, an effective rate of about 9.4% on gross pay. Since Alaska adds nothing on top of that at the state level, this filer’s biggest paycheck deduction by far stays federal, with Social Security and Medicare making up most of the rest.
Frequently Asked Questions
Does Alaska have a state income tax?
No. Alaska is one of only a handful of states with no individual income tax at all. Wages, retirement income, Social Security, and investment income all go untaxed at the state level.
What is the Permanent Fund Dividend and does Alaska tax it?
The Permanent Fund Dividend is an annual cash payment funded by earnings on Alaska’s oil-wealth investment fund, paid to eligible residents since 1982. For 2026 it totals $1,200, made up of a $1,000 base dividend and a separate $200 energy relief payment signed into the state budget in June 2026. Alaska does not tax the dividend since it has no income tax, but the IRS treats it as federally taxable income.
Does Alaska have a sales tax?
There’s no statewide sales tax. Individual cities and boroughs can charge their own local sales tax, ranging from about 1% to 7.5%, averaging around 1.82% statewide. Anchorage, the state’s largest city, charges no local sales tax at all.
Why does my Alaska paycheck have an unemployment insurance deduction?
Alaska is one of the few states that requires employees, not just employers, to contribute to the state unemployment insurance fund. For 2026 that’s 0.50% of wages up to a $54,200 wage base, capping out at $271 for the year.
Is property tax high in Alaska?
It runs close to the national average, around 0.94% effective statewide, but varies enormously by borough. Anchorage residents pay some of the highest median property tax bills in the state, while several rural census areas have among the lowest property taxes anywhere in the country.
Is Alaska really one of the most tax-friendly states?
By the numbers, yes. Alaska ranks 4th overall on the Tax Foundation’s 2026 State Tax Competitiveness Index thanks to having neither an income tax nor a statewide sales tax. The trade-off is a cost of living well above the national average, especially for housing, fuel, and groceries outside the road system.
What makes Alaska different isn’t just what it doesn’t tax. It’s that the state hands money back through the Permanent Fund Dividend instead, something no other state does at any meaningful scale. Whether that outweighs the cost of living depends entirely on where in Alaska someone actually lives and works, since the gap between Anchorage prices and rural Alaska prices can be as wide as the tax gap between Alaska and anywhere else.