What Alaska taxes instead
Alaska and New Hampshire are the only states with neither a wage income tax nor a statewide sales tax. In Alaska, resource revenue does the work that income tax does elsewhere.
- Oil and gas revenue. Production and severance taxes on North Slope oil have historically funded a large share of the state budget, which is why Alaska can skip both income and statewide sales tax. It also makes revenue unusually sensitive to oil prices.
- Permanent Fund Dividend. Alaska pays residents an annual dividend from its sovereign wealth fund rather than taxing them. The dividend is taxable as federal income, so it appears on your federal return even though the state takes nothing.
- Local sales taxes. There is no statewide sales tax, but roughly 100 boroughs and cities levy their own. Juneau charges around 5% and Wasilla 2.5%, while Anchorage charges none — so what you pay depends entirely on where you shop.
None of this touches your paycheck. What comes out is federal tax, FICA, and the AK unemployment insurance premium, which the calculator above includes. The catch is that a bigger paycheck is not the same as a lower total burden: what the state skips on income it generally collects somewhere else. Compare against a state that does tax income using the state paycheck calculators.
Top Cities in Alaska
The largest cities in Alaska, by U.S. Census Bureau estimate for July 1, 2025:
- Anchorage — 287,155 residents
- Juneau — 31,609 residents
- Fairbanks — 31,468 residents
Frequently Asked Questions
What is the Alaska state income tax rate?
Alaska has no state income tax on wages. Your mandatory paycheck deductions are federal income tax (10–37% depending on income), Social Security (6.2% up to $184,500 in 2026), and Medicare (1.45%, plus 0.9% on wages over $200K), plus the AK unemployment insurance premium.
How much is taken out of my paycheck in Alaska?
For a single filer earning $75,000 in Alaska (2026): about $7,670 in federal income tax, $5,738 in Social Security and Medicare, $0 in Alaska state income tax, and $271 for the AK unemployment insurance premium, leaving about $61,322 a year, or $2,359 per biweekly paycheck.
Why is Alaska unemployment tax taken out of my paycheck?
Alaska requires employees to contribute 0.5% of wages, up to $54,200 for 2026, to the unemployment insurance fund.
Does Alaska have daily overtime?
Yes, after 8 hours in a day, for employers with four or more employees.
What is the minimum wage in Alaska?
$14.00 an hour since July 1, 2026.