Vermont Salary Calculator 2026 — Free Take-Home Pay Estimator

Vermont Income Tax Summary

Vermont has a progressive income tax system with rates ranging from 3.35% to 8.75% across six brackets. The state taxes most forms of income but offers a standard deduction and personal exemption. Vermont's income tax burden is moderate relative to other New England states. The state also has a state sales tax and property taxes. [Source: Vermont Department of Taxes, 2026]

Vermont Income Tax Rules

• Progressive tax with six brackets: 3.35%, 6.6%, 7.6%, 8.25%, 8.75%, and 8.75% [Source: Vermont Department of Taxes, 2026]
• Standard deduction: approximately $7,000 for single, $14,000 for married (indexed) [Source: Vermont Department of Taxes, 2026]
• Personal exemption: $4,550 per exemption (phaseouts apply)
• All income types are taxable: wages, salaries, tips, interest, dividends, capital gains
• Social Security benefits may be partially taxable depending on income
• Retirement income from pensions and IRA distributions is generally taxable
• No deduction for federal income tax paid

Vermont Payroll & Withholding Rules

Employers must withhold Vermont income tax using graduated withholding tables. Unemployment insurance is employer-paid only. Vermont has no state disability insurance program for employees. No mandatory local income taxes exist. [Source: Vermont Department of Taxes, 2026]

Local Taxes in Vermont

Vermont does not levy county or city income taxes. Local governments rely on property taxes, which are relatively high, and local option sales taxes in some communities. There are no local income taxes assessed on individuals.

Cost of Living Context

Vermont's cost of living is about 14% above the national average. Housing costs are elevated, especially in popular areas like Burlington and ski resort communities. Heating costs in winter are significant. The state is mostly rural with a small population. [Source: Vermont Department of Taxes, 2026]

Real-World Example: Vermont

For a single filer earning $55,000/year in Burlington, Vermont:

• Federal taxable income: ~$40,400 (after $14,600 standard deduction)
• Vermont state tax: ~$2,600 (using 2026 brackets)
• Estimated take-home: ~$3,982/month (pre-FICA, pre-insurance)

Note: Actual results vary based on deductions, credits, and local taxes.

Vermont FAQs

Q: What are the income tax brackets in Vermont? [Source: Vermont Department of Taxes, 2026] A: Vermont has six brackets from 3.35% to 8.75%. [Source: Vermont Department of Taxes, 2026]

Q: Does Vermont tax Social Security benefits? A: Social Security may be partially taxable depending on your income level.

Q: Does Vermont tax retirement income? A: Yes, pension and IRA distributions are generally taxable at regular rates.

Q: What is the standard deduction in Vermont? [Source: Vermont Department of Taxes, 2026] A: Approximately $7,000 for single filers and $14,000 for married couples filing jointly. [Source: Vermont Department of Taxes, 2026]

Q: Does Vermont have a state sales tax? A: Yes, Vermont has a state sales tax rate of 6%, with local additions. [Source: Vermont Department of Taxes, 2026]

Q: Are capital gains taxed in Vermont? A: Yes, capital gains are taxed as ordinary income at Vermont's progressive rates.

Q: Does Vermont have any local income taxes? A: No, Vermont does not impose local income taxes on individuals.