“The Historic Main Street Trolley in Memphis, Tennessee, with buildings, an elegant station, and water fountains in the background.”
Davel5957 | E+ | Getty Images
Live like a king on $100,000 in Memphis, Tennessee.
The personal finance site compared 50 major cities across the country, calculating net income after state and federal taxes and looking at how much is left over after rent, groceries, utilities and health-care costs.
“The cost of living is a huge deal, and it’s not a coincidence that many of the top-ranked cities are in states that don’t tax income,” said Andrew DePietro, lead researcher at GOBankingRates.
In all, there are seven states that forgo individual income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
Currently, Tennessee levies a 2% tax on interest and dividends, but salaries are exempt. This so-called Hall Income Tax, named for the state senator who introduced the bill to institute the levy in 1929, will be fully phased out by 2022.
New Hampshire residents also pay a 5% tax on dividends and investment income, but taxes aren’t levied on wages.
The story is different in the Golden State.
California residents feel the pinch of both high income taxes — the top rate is 13.3% — and high costs of living.
In fact, a San Francisco worker with a gross salary of $100,000 can expect to spend close to $28,000 after paying state and federal income taxes, GOBankingRates found. The median annual rent totals $52,200.
After accounting for other living expenses, that Bay Area worker will wind up in the red by $2,734, according to the analysis.
See below for the best cities to reside in if you’re earning $100,000.
Colorful cafe bars at the iconic Beale Street music and entertainment district of downtown Memphis, Tenn.
benedek | iStock | Getty Images
Workers in Memphis get to pocket more of their pay because their wages aren’t subject to state income taxes.
The lower cost of living in Memphis means employees still have plenty of their paycheck left over after paying the rent and buying groceries.
The annual median rent in this Tennessee city is $10,344, while the average annual cost of groceries is $3,084 according to GOBankingRates.
After factoring in additional costs, including health care and utilities, a Memphis-based worker earning $100,000 in gross salary still has $46,093 left over, the website found.
El Paso, Texas
DenisTangneyJr | E+ | Getty Images
Texans benefit from zero income taxes at the state level.
In El Paso, a $100,000 gross salary becomes $79,247 in net pay after federal income and payroll taxes.
City residents also have access to affordable housing, with the median annual rent totaling $12,252.
After considering the cost of groceries, utilities and health care, an El Paso resident bringing in $100,000 has $44,185 left over, GOBankingRates found.
Paul Marotta | Getty Images