Understanding Your Virginia Paycheck: State & Local Tax Guide
If you live or work in the Old Dominion, understanding your take-home pay requires a close look at the Virginia paycheck calculator. Virginia's tax system is unique, featuring a progressive state income tax structure, a significant recent increase in standard deductions, and a distinct approach to local taxes. Whether you're starting a new job in Richmond, commuting to Northern Virginia (NoVA), or working remotely from Virginia Beach, knowing how VA state & local tax impacts your net pay is essential for accurate financial planning.
This guide will walk you through the intricacies of Virginia's withholding system, including the 2024 and 2025 tax updates, reciprocal agreements with neighboring states, and the truth about local taxes in Virginia's independent cities. By the end, you'll have a clear picture of where your hard-earned money goes and how to maximize your paycheck.
How to Use This Calculator
Our Virginia Paycheck Calculator is designed to provide a precise estimate of your net pay by factoring in federal, state, and FICA taxes. Here is how to use it effectively:
- Enter Gross Pay: Input your total earnings before any deductions. This can be your annual salary or hourly wage.
- Select Pay Frequency: Choose how often you get paid (Weekly, Bi-Weekly, Semi-Monthly, Monthly, or Annually). This determines how your tax liability is spread across pay periods.
- Filing Status: Select "Single" or "Married". This affects your standard deduction and tax brackets for both federal and state calculations. Note that Virginia's filing status rules generally follow your federal return.
- Dependents: Enter the number of dependents you claim. Each dependent reduces your taxable income through personal exemptions.
- Calculate: Click the "Calculate Net Pay" button to see a breakdown of your estimated taxes and final take-home amount.
Virginia State Income Tax: The Progressive System
Virginia utilizes a progressive income tax system, meaning the more you earn, the higher the percentage of tax you pay on the top portion of your income. However, the brackets top out relatively quickly compared to the federal system.
For the 2024 and 2025 tax years, the tax rates are as follows:
- 2% on the first $3,000 of taxable income.
- 3% on taxable income between $3,001 and $5,000.
- 5% on taxable income between $5,001 and $17,000.
- 5.75% on all taxable income over $17,000.
Because the top bracket starts at just $17,000, most full-time workers in Virginia will pay the 5.75% rate on the majority of their income. This makes the effective tax rate for many Virginians hover close to that 5% to 5.5% range.
Standard Deductions and Exemptions (2024-2025 Update)
One of the most significant changes in recent years is the increase in the Virginia standard deduction. This change directly reduces your taxable income, keeping more money in your pocket.
Standard Deduction
For the 2024 tax year (returns filed in 2025), the standard deduction amounts are:
- Single / Married Filing Separately: $8,500 (up from previous years).
- Married Filing Jointly: $17,000 (up from previous years).
This increase provides substantial relief, especially for lower and middle-income earners, by shielding a larger portion of income from the 5.75% tax rate.
Personal Exemptions
In addition to the standard deduction, you can claim personal exemptions. For 2024/2025, the exemption amount is $930 for yourself, your spouse, and each dependent.
Example: A married couple with two children would claim 4 exemptions (2 for themselves + 2 children), totaling $3,720 ($930 x 4) in exemptions. Combined with the $17,000 standard deduction, their first $20,720 of income is effectively tax-free for state purposes.
The Truth About "Local Tax" in Virginia
The title of this calculator mentions "Va State & Local Tax," and this often causes confusion. Unlike states like Maryland or Ohio, where local jurisdictions (counties or cities) levy a specific income tax on wages, Virginia generally does not have a local income tax on wages.
However, Virginia's independent cities and counties do levy other types of local taxes that affect your wallet, though they typically aren't withheld from your paycheck:
- Personal Property Tax (Car Tax): This is the most famous (or infamous) local tax in Virginia. Cities and counties tax vehicles annually based on their value. While not a payroll tax, it is a significant local tax liability that residents must budget for.
- Real Estate Tax: Levied by localities on homeowners.
- Business Professional and Occupational License (BPOL) Tax: Some localities tax gross receipts of businesses, which can affect self-employed individuals, but this is not a direct withholding from employee wages.
So, when you see "Local Tax" in the context of a Virginia paycheck, for the vast majority of employees, the amount withheld will be $0.00. Your paycheck deductions will primarily consist of Federal Income Tax, FICA (Social Security & Medicare), and Virginia State Income Tax.
Reciprocity: Working in DC or Maryland
Virginia has reciprocal agreements with several neighboring jurisdictions: District of Columbia, Kentucky, Maryland, Pennsylvania, and West Virginia.
What this means for you:
- If you live in Virginia but work in Washington, D.C., or Maryland, you only pay income tax to Virginia.
- Your employer should withhold Virginia tax, not DC or MD tax.
- If your employer mistakenly withholds tax for the state where you work, you will need to file a non-resident return to get a refund and pay Virginia separately.
- To ensure correct withholding, file the appropriate exemption form (e.g., Form D-4A for DC, MW507 for MD) with your employer.
Federal Taxes and FICA
Beyond state taxes, your paycheck is subject to federal withholding.
Federal Income Tax
This is calculated based on the IRS tax brackets, which range from 10% to 37%. Your filing status and the deductions you claim on your W-4 form determine how much is withheld. Our calculator uses the simplified 2024/2025 brackets to estimate this liability.
FICA Taxes (Social Security & Medicare)
FICA taxes are mandated by federal law and are flat rates for most employees (see IRS Topic 751 for details):
- Social Security: 6.2% of your gross wages, up to the taxable wage base limit ($168,600 for 2024, rising in 2025).
- Medicare: 1.45% of all gross wages, with no limit. High earners (over $200,000) pay an additional 0.9% Additional Medicare Tax.
Avoid Underpayment Penalties
If you have multiple streams of income, such as freelance work, investment dividends, or a side business, standard withholding from your paycheck might not cover your total tax liability. Virginia, like the IRS, requires you to pay taxes as you earn income throughout the year.
To avoid an underpayment penalty, you generally need to ensure that your total withholding and estimated tax payments equal at least:
- 90% of your tax liability for the current year, or
- 100% of your tax liability for the previous year (110% if your adjusted gross income is over $150,000).
If you discover you are under-withheld, you can submit a new Form VA-4 to your employer to request additional withholding from each paycheck, or you can make quarterly estimated payments directly to the Virginia Department of Taxation.
Example Calculation
Let's look at an example of a single filer living in Arlington, VA, earning $75,000 annually.
- Gross Pay: $75,000
- Federal Standard Deduction: ~$14,600
- VA Standard Deduction: $8,500
- VA Personal Exemption: $930
Virginia Taxable Income Calculation:
$75,000 (Gross) - $8,500 (Standard Deduction) - $930 (Exemption) = $65,570 Taxable Income.
Virginia Tax Calculation:
- First $3,000 @ 2% = $60
- Next $2,000 @ 3% = $60
- Next $12,000 @ 5% = $600
- Remaining $48,570 @ 5.75% = $2,792.78
- Total VA Tax: ~$3,512.78 / year
This amounts to approximately 4.68% of the total gross income, which is the effective state tax rate.
Frequently Asked Questions
For more details on federal tax brackets, check out our Federal Income Tax Calculator. If you are self-employed, you might also need our Self Employed Tax Calculator.
Disclaimer: This calculator is for educational purposes only and should not be considered professional tax advice. Virginia tax laws are subject to change. Please consult with a qualified CPA or tax professional for your specific situation. You can verify current rates at the Virginia Department of Taxation.