Two different numbers describe the tax on your pay, and they are computed by two different sets of rules. What your employer takes out follows the withholding instructions your state publishes for payroll departments. What you actually owe follows the tax law itself. Most of the time they land close together. Sometimes they do not, and the difference is money that sits with the state until you file — or a bill waiting for you in April.
Below are four states where we can show the gap and prove both halves of it. That second condition is the whole reason there are four and not twenty, and it is worth explaining before the numbers.
Why proving it is harder than computing it
We could compute this gap for twenty-five states tomorrow. We will not publish it for twenty-five, because computing is not proving. A gap is the difference between two of our calculations: our reading of the state's withholding method, and our reading of the state's tax law. If either drifts by a fraction of a point, the gap we print is wrong — and it would be wrong in the worst possible way, as a confident statement about a real payroll system.
So a state appears here only when both sides are anchored outside our own work:
- The withholding side must reproduce a worked example the agency itself published — their numbers, their inputs, our engine, same answer.
- The tax-owed side must be corroborated by a hand that has not seen our code — either an independent calculator built by someone else that arrives at the same figure, or a separate derivation made from the state's own forms and statute. These are not equally strong, and we say which one each case rests on.
Twenty-five states pass the first test. Four pass both. The states with the largest gaps we measured are not on this page, precisely because we cannot yet prove the second half for them. When we can, they will be.
North Carolina: a higher withholding rate that takes less
North Carolina publishes a withholding rate of 4.09% against an income tax of 3.99% — a tenth of a point more. The intuition is that you are over-withheld. You are not: on a $60,000 salary you owe about $1,885 and your employer takes out about $1,820, leaving roughly $65 a year short.
The reason is the base, not the rate. The employer booklet's annualised method subtracts $2,500 for each allowance claimed before applying the 4.09%, on top of the same $12,750 standard deduction. The income tax itself grants no such per-allowance amount. With one allowance claimed, that $2,500 removes about $102 of withholding, while the extra tenth of a point adds back only about $47. The base wins.
But only up to a point, and this is where the mechanism becomes useful rather than merely surprising. The allowance is worth a fixed amount — about $102 a year, whatever you earn. The extra tenth of a point grows with your income: roughly $47 at $60,000, $87 at $100,000, $137 at $150,000. So the two cancel somewhere around $110,000 to $120,000, and above that North Carolina flips to over-withholding — about $36 a year at $150,000. There is no single clean crossover figure to quote, because North Carolina rounds each paycheck to the whole dollar, which makes the balance wobble by a few dollars either side of the line. The rule to take away is not “North Carolina under-withholds”; it is that a fixed allowance and a percentage point scale differently, so which one wins depends on what you earn.
Both anchors. Withholding: reproduces the worked examples on pages 19–20 of North Carolina's NC-30 (Web 11-25) employer booklet, which is also where the $2,500 allowance and the 4.09% rate are printed. Tax owed: cross-checked against SmartAsset's North Carolina calculator on 5 August 2026, take-home within 0.35%.
New Jersey: over-withheld by a tenth
New Jersey runs the other way, and further. On the same $60,000 salary the tax owed is about $1,767 while the withholding tables take about $1,955 — roughly $187 more than you owe, about 10.6%. That money comes back at filing, having spent the year with the state rather than in your account.
This is what a withholding table looks like when it is built to avoid under-collecting. It is not an error, and New Jersey is not unusual in this: a payroll table has to work for every employee who shares a filing status, so it leans toward taking slightly too much rather than too little.
Both anchors. Withholding: reproduces six worked examples published by the state. Tax owed: cross-checked against Talent.com on 6 August 2026 at a $100,000 salary, take-home within 0.41%, with every residual difference traced to their older program rates. The gap figures above are at $60,000, where the same comparison lands within 0.5% once their pre-2026 disability and family-leave rates are accounted for.
Louisiana: the same base, a different rate, on purpose
Louisiana is the clean case, and the mirror image of North Carolina. Both sides start from the same place — income less a standard deduction of $12,875 — and the only thing that differs is the rate: the tax is 3.00%, the withholding tables use 3.09%. On $60,000 that is $1,414 owed against about $1,456 withheld, roughly $42 back at filing, and the gap grows in step with your salary because nothing about it is fixed.
What makes Louisiana worth reading is that the state says out loud why it does this. Its own bulletin explains that the tables “add an additional 0.09% to provide a ‘cushion’ in an effort to prevent taxpayers from having a balance due”. This is a deliberate over-collection, published as such — not a quirk of a table, and not an error.
One caveat belongs here rather than in a footnote: Louisiana has not yet published its final 2026 standard deduction. The $12,875 above is the figure the state itself used to build the withholding tables, and it warns that the official amount “may be slightly different” once the January 2026 inflation data is in — its own fiscal office suggests it will come out slightly lower, which would move the tax by about a dollar a year. We use the only number the state has put in writing, and we would rather tell you it is provisional than let a clean figure imply a certainty that does not exist.
Both anchors. Withholding: reproduces the state's published formula and its 3.09% rate from R-1306 (1/26). Tax owed: checked on 12 August 2026 by an independent derivation — a separate reading of Form IT-540 and the statute, made without access to our code, which arrived at $1,414 against our $1,413.75, identical before the form's mandatory rounding to the dollar. That is a different, and weaker, kind of corroboration than the other three cases, which were checked against calculators built by other people; we mark it as such rather than blend the two.
Illinois: the two rules agree to the cent
Illinois is the case that shows the gap is not inevitable. Tax owed comes to $2,825.21; the withholding method produces $2,825.16. Five cents apart on the year. When a state's payroll instructions are simply its tax law expressed per pay period, this is what you get, and nothing is owed or refunded because of the method.
Both anchors. Withholding: reproduces twenty worked examples published by the state. Tax owed: cross-checked against SmartAsset on 5 August 2026, take-home within 0.09%, with FICA identical to the dollar on two independent calculators.
Arizona: the gap is set by a box you tick, not by the state
Arizona is the case where the two sides use the same rate and still disagree. The tax is a flat 2.5%, and 2.5% is also one of the percentages you can elect on Form A-4 — so the arithmetic looks like it should close, and it does not. Tax owed is 2.5% of income after the standard deduction; withholding is your elected percentage of gross pay, before any deduction. Same rate, different base.
What makes Arizona different from the four cases above is who controls the gap. It is not the state's formula, it is your election. On $60,000 the tax owed is $1,097.50. Leave the A-4 alone and your employer must use the statutory default of 2.0%, which withholds about $1,200 across the year — you finish roughly $102 ahead. Tick the 2.5% box that matches the tax rate and you withhold about $1,500 instead, finishing about $400 ahead. Same salary, same state, same law: the difference is one box.
That is why we will not quote you a single Arizona number. Either figure is correct for the person it describes, and quoting only the larger one would turn a choice you control into a defect of the state's formula. Arizona also has no allowances to claim — the A-4 asks for a percentage, not a count — so the allowance assumption below does not apply to this case. There are seven electable percentages, from 0.5% to 3.5%, plus a zero election you must certify you qualify for.
One caveat belongs here too: Arizona has not published its 2026 standard deduction. The $16,100 we use is the federal figure that Arizona's own indexation rule points to, and it is the only defensible number available — but the state's own estimated-tax form still tells taxpayers to estimate 2026 with the 2025 amount, which would move the tax to $1,106.25. Nine dollars, on a page about a $102 gap: small, and worth saying rather than hiding.
Both anchors. Withholding: reproduces the Department's own worked example to the cent — $2,000 of biweekly wages at an elected 2.5% gives $50.00 — and that example passes its rate explicitly, so it tests the mechanism and not our default. Tax owed: checked on 12 August 2026 by an independent derivation that reached $1,097.50 against our $1,097.50, reading the statute and the Department's 2026 forms without access to our code. As with Louisiana, that is a second hand doing the arithmetic rather than a calculator built by someone else, and we mark it as the weaker of the two kinds.
What these five numbers assume
All of the above is a single filer earning $60,000, paid every two weeks, claiming one allowance on the state certificate where the state uses allowances at all, with no pre-tax deductions. Change the allowances and every figure moves — that is not a weakness of the measurement, it is how withholding works, and it is the reason we publish the mechanism rather than a ranking. Your own numbers come from the calculator on each state's page, where you can set your own inputs and see the official document each rate was read from.
One thing this page cannot tell you is whether your own employer follows the percentage method, the wage-bracket tables, or applies extra withholding you requested. All three are legal, they do not always agree, and only your stub knows which one you got.