Income Reality in Minnesota — Taxes, Housing & Salary
High taxes, strong economy, below-average housing costs
Data: 2026-Q2 · BLS · HUD · KFFIncome tax overview
Minnesota has a top income tax rate of 9.85%, one of the highest in the nation.
Housing snapshot
Median 1BR rent in Minneapolis is approximately $1,400. The broader Twin Cities metro is $1,200-$1,500. Greater Minnesota is significantly more affordable.
1BR FMR across major Minnesota cities: $1,405 – $1,405/mo (HUD FY2026)
Cost of living summary
At an index of 98, Minnesota is about 2% cheaper than the national average of 100.
Minnesota has high income taxes but below-average housing costs and a very strong economy. The Twin Cities metro is a major center for healthcare, finance, and retail.
Major cities
Purchasing power context
Minnesota's high income tax significantly reduces take-home pay at higher incomes, partially offset by below-average housing costs.
Purchasing Power Reality
What your salary feels like in other cities
Salary reality examples
Comfortable in Minneapolis. Below-average housing costs partially offset higher taxes.
Good purchasing power. Minnesota's strong job market supports career growth.
Moderate. High tax rate significantly impacts take-home at this level.
FAQ — Income Reality in Minnesota
What is Minnesota's income tax rate?
Minnesota has a top income tax rate of 9.85% on income over $183,340 (single). Middle incomes face rates of 6.8-7.85%.
Is Minnesota affordable?
Minnesota has a cost of living index of 98, near the national average. Housing is moderately priced despite being a major metro state.
Cities in Minnesota
Related tools
Cost of Living Index from C2ER. This is a picture, not a verdict.