The Grayling guide
Grayling city income tax, explained
Grayling — the small northern-Michigan city on the Au Sable River — charges 1% to residents and 0.5% to non-residents who work there. This calculator applies the exact rate.
Grayling’s rate: 1% resident, 0.5% non-resident
Grayling levies 1% on residents and 0.5% on non-residents who earn wages in the city. It’s the standard Michigan 1% structure, applied to wages, salaries and self-employment income, with Social Security excluded. For a small city, the tax is a meaningful share of general-fund revenue.
The north-country economy
Grayling’s employment base is built on tourism, recreation, healthcare, and the state and military presence in the region — including the National Guard training operations nearby. The Au Sable river season brings a surge of seasonal work. Residents pay the full 1%; commuters from the surrounding Crawford County townships pay 0.5% on their Grayling wages.
What $40,000 looks like in Grayling
At $40,000, single, one exemption, a Grayling resident pays about $400 a year at 1%, on top of roughly $1,700 to the state. A non-resident commuter pays about $200. In biweekly terms that’s about $15 (resident) or $8 (commuter) per check.
Withholding and filing
Employers with Grayling workers withhold the tax as a stub line. Wage earners rarely file. Self-employed residents pay quarterly, and annual returns follow the state spring calendar. The city’s finance office administers the tax.
A taxing island in the north
Grayling is one of only a few taxing cities in the northern Lower Peninsula — most of the surrounding area has no city income tax. That makes the city line a real differentiator between a Grayling job and work in the surrounding townships, and it’s exactly what the residency toggle makes visible.
Hourly work and overtime in Grayling
Grayling’s economy — tourism, recreation, healthcare and the state presence — runs heavily on hourly work, and the city tax applies to every shift and overtime dollar at the flat 1% (or 0.5% non-resident). A hospitality worker at $18/hour grosses $720 a week; the city takes $7.20 as a resident or $3.60 as a non-resident on top of federal and FICA. The hourly and overtime modes apply the rate automatically.
Self-employment in Grayling
Self-employed Grayling residents owe the 1% on net profit, paid quarterly with state and federal estimates. An outfitter or guide clearing $38,000 net owes about $380 a year to the city. Independent contractors based outside the city who work inside it owe the 0.5% non-resident rate on in-city earnings. The self-employment mode includes the city rate in the annual total.
A real check, broken down
Here is what one biweekly check looks like for a Grayling resident at $42,000, single, no pre-tax deductions: gross $1,615, federal about $128, FICA about $124, Michigan about $57, Grayling about $16. That nets roughly $1,290 per check, or about $33,540 a year. A commuter from the surrounding townships pays about $8 per check instead — half the line, as the residency toggle shows.
Retirees in Grayling
For retirees living in Grayling, Social Security is excluded from the city income tax. Pension income follows the retirement phase-in by birth year: workers born after 1945 see up to $67,610 of retirement income excluded in 2026. A retired Grayling resident with only Social Security and a modest pension often owes very little to the city. The calculator applies the same exclusion logic.
Seasonal tourism work
Grayling’s Au Sable season and the north-country recreation economy bring a wave of seasonal jobs every year — guides, lodging, restaurants, state facilities. All of that seasonal work inside the city carries the same 1% resident or 0.5% non-resident rate, even at part-time summer hours. A seasonal worker earning $8,000 over the season pays $80 as a resident or $40 as a non-resident. The hourly mode with a part-year schedule captures the season’s true take-home.
What to watch in the next tax year
Grayling’s 1%/0.5% structure is long-settled and no rate change is on the books for 2026. What does move each year is the federal standard deduction and brackets, Michigan’s exemption amount, and the Social Security wage base — all read from the current MI-2026 data file. Re-run the page after the new year to pick up the refreshed figures.
Who should use this calculator, and how
This tool is for anyone who lives or works in Grayling: residents who want the true net on their pay, commuters from the surrounding Crawford County townships, seasonal workers in the tourism economy, and self-employed residents building quarterly estimates. Enter your gross, frequency, filing status, exemptions and pre-tax amounts; the calculator returns the exact net per period with the Grayling line shown separately from state and federal. Toggle residency to see the half-rate commuter case, or use the hourly mode with a part-year schedule to capture a tourism season accurately.
How Grayling fits the state picture
Grayling is one of only a handful of taxing cities in the northern Lower Peninsula — a genuine anomaly, since most cities north of the Grand Rapids–Saginaw line have no wage tax. Its 1%/0.5% split is the standard Michigan structure, the same shape used in Lansing and Jackson, but its location makes it stand out: drive fifteen minutes in any direction and the city line disappears. For a region where housing and jobs are spread across unincorporated townships, that distinction matters in ways it simply doesn’t in metro Detroit.
How to check your withholding is right
After your first paycheck, check the stub for a line labeled for Grayling. If the line is missing and you live or work in the city, ask payroll to set up city withholding. If it’s there, compare against this calculator’s city line: it should match your gross, reduced by pre-tax deductions, times 1% (resident) or 0.5% (commuter). A small variance is normal around the exemption; a systematic difference is worth a call to the city’s finance office.
Three Grayling scenarios
A $42,000 resident nets about $33,540 a year with the 1% line; a $40,000 non-resident commuting from the surrounding townships pays 0.5% on Grayling wages, about $200 a year; and a $42,000 resident with a 5% 401(k) plus health premiums sees the city line shrink with the pre-tax base. Run all three through the calculator and each comes back with a different per-check number.
The full withholding stack in Grayling
A Grayling resident’s check comes out in four visible layers: federal progressive tax after the standard deduction; FICA at 6.2% and 1.45%; Michigan’s flat 4.25% on the state taxable base after the $5,900 exemption; and Grayling’s 1% on the city base. Pre-tax 401(k) and health contributions reduce the federal, state and city lines together, while FICA is computed on wages net of health only. The calculator reproduces that ordering exactly, so the per-check figure matches a real stub within a few dollars.
How the calculator handles Grayling exactly
Set city to Grayling and residency to resident (or non-resident). Enter your gross, frequency, filing status, exemptions and pre-tax amounts. The tool applies Grayling’s 1% (or 0.5%), Michigan’s 4.25%, FICA and federal brackets, and returns the exact net per period. Use the hourly mode with a part-year schedule to capture a tourism season, or toggle to a surrounding township to see the no-tax comparison.
What the tax funds and its stability
Grayling’s 1%/0.5% structure is a meaningful share of the small city’s general-fund revenue. No rate change is on the books for 2026. As one of the northernmost taxing cities in the state, it stands out in a region where the surrounding townships charge nothing — which keeps the line visible in local hiring and housing decisions.
The comparison worth running
The single most useful run on this page is Grayling against a surrounding township. Enter the same salary twice, change only the city, and read the difference on the city line: roughly $420 a year on a $42,000 income. In a county where the township side has no city tax, that gap is the whole story of this page.
Planning your withholding for the season
If you work a tourism season in Grayling and live outside the city, tell payroll your non-resident status so the half rate applies from the first check. If you live in the city, confirm the full 1% is being withheld. Either way, the calculator’s hourly mode with your weekly hours and a part-year schedule gives you the exact net you’ll actually bank, which is more than a generic annual tool can promise.
Seasonal tourism work in Grayling is subject to the same city tax as year-round jobs. Even part-time seasonal wages earn the 1% resident or 0.5% non-resident rate.