AIRINC's 2026 Global Tax Rates map has been updated, giving mobility teams a fresh view of how tax rules affect take-home pay around the world.

For the United States, the story is not only about federal tax. State tax differences can create very different outcomes depending on where an assignee is based.

This means two U.S. assignments with similar compensation can have different take-home pay outcomes, assignment costs, and employee communication needs.

What changed in the 2026 U.S. tax update?

2026 marks the second year under the U.S. tax changes implemented through the U.S. budget reconciliation bill known as the One Big Beautiful Bill (OB3). This year, inflation-indexing adjustments were made to the tax brackets and standard deduction, along with an increase in the Social Security wage base.

Other federal tax changes for 2026 include:

  • Effective in 2026, a phaseout of itemized deductions has been introduced. Individuals in the top 37% bracket will have their itemized deductions reduced at a rate of 2/37 for each dollar over the 37% bracket.

  • OB3 increased the State and Local Tax (SALT) deduction cap to $40,400 for 2026 ($20,200 for taxpayers filing separately). The limit is scheduled to revert to $10,000 in 2030. The expanded deductible SALT amount is phased down when income exceeds $505,000 ($252,500 for married taxpayers filing separately).

  • For tax years 2025 through 2028, individuals may deduct up to $10,000 of interest paid on an automobile loan for a car purchased after 2024. The deduction is limited to qualifying new personal-use vehicles with final assembly in the United States. The deduction phases out when modified adjusted gross income exceeds $200,000 for taxpayers filing jointly, or $100,000 for other filing statuses. The car loan interest deduction is available through 2028 and expires beginning in 2029.

  • Effective in 2026, individuals who itemize deductions may claim charitable contributions only to the extent they exceed 0.5% of adjusted gross income.

  • Effective in 2026, individuals who do not itemize deductions may claim a deduction for charitable contributions of up to $1,000 for single filers and $2,000 for joint filers.

The net effect varies by income level, but generally there is a small reduction in tax for most taxpayers. Social Security taxes increase at higher income levels. Next year, for 2027, we expect further inflation-indexing adjustments to tax brackets, the standard deduction, and the Social Security wage base.

Family size and marital status can change the calculation

Different tax brackets apply based on one of four filing statuses. Generally, the most favorable filing status is Married Filing Jointly. The next most favorable filing status is Head of Household, followed by Single. Married Filing Separately has the least favorable tax brackets.

Head of Household filing status is generally used by unmarried parents with qualifying dependent children. Taxpayers with qualifying children under age 17 may claim a $2,200 Child Tax Credit per child. The credit is phased out at higher income thresholds that vary by filing status.

Why there's no singular U.S. tax rate

U.S. federal income tax applies across the country, but it is only part of the tax picture. State income taxes can add a significant layer of cost, with rates varying widely by location. Some states impose relatively high income taxes, others have lower rates, and several do not tax employment income at all. In some jurisdictions, local income taxes also apply.

For mobility teams, this means there is no single "U.S. tax rate." An assignee's effective tax rate, and ultimately their take-home pay and assignment cost, depends in part on the state where they are based.

State tax rules also continue to evolve. Many states are still determining which provisions of the One Big Beautiful Bill (OB3) to adopt through IRC conformity, the process by which states decide whether to incorporate federal tax law changes into their own tax codes. Key questions include whether states will adopt the new itemized deduction phaseout and other federal deduction changes, and whether they will continue the trend of reducing individual income tax rates.

For 2026, Georgia, Indiana, Kentucky, Mississippi, Montana, Nebraska, Ohio, and Oklahoma implemented tax rate reductions, resulting in slightly lower effective tax rates in those states.

Why state taxes matter for assignee take-home pay

State tax differences can directly affect an assignee's take-home pay. Based on our effective tax rate analysis, net take-home pay on a salary of USD 150,000 can range from as low as USD 116,000 in the high-tax location of New York City to as high as USD 127,500 in states that do not impose an income tax on wages.

A package that works in one state may not produce the same outcome in another. These state variations also matter for cost estimates. State tax differences can also affect employee satisfaction if the tax impact is not clearly explained before the move.

For tax-equalized assignees, state tax differences may affect company costs. For non-tax-equalized or locally hired mobile employees, the impact may be felt more directly by the employee.

Summary

This effective tax rate analysis reinforces the importance of modeling real employee scenarios rather than relying solely on headline tax rates or treating the U.S. as a single, uniform tax location. Make sure employees understand that take-home pay may vary depending on state, family size, and filing status.

Factors for mobility teams to consider:

  • In the U.S., filing status, deductions, child tax credits, income level, and family circumstances can all affect the overall tax position.

  • A single employee and a married employee with children may experience different effective tax outcomes.

  • Review U.S. assignment cost projections using state-specific assumptions.

  • Consider state tax differences when comparing assignment locations or preparing balance sheets.

FAQ

What changed in U.S. tax rates in 2026?

AIRINC's 2026 Global Tax Rates update reflects the latest federal and state tax rules affecting take-home pay. For U.S. assignees, the key takeaway is that state tax differences continue to play an important role in overall tax outcomes.

Why do U.S. tax rates vary by state?

Federal tax applies across the United States, but state income tax varies significantly. Some states have higher income tax rates, while others do not impose state income tax on employment income.

Why does this matter for mobility programs?

State tax differences can affect take-home pay, assignment cost projections, tax equalization, compensation planning, and employee communications.

Does family size affect U.S. tax outcomes?

Yes. Filing status, deductions, child tax credits, income level, and family circumstances can all affect an employee's effective tax rate and take-home pay.

Explore AIRINC's updated Global Tax Rates map to compare how taxes affect take-home pay across countries and U.S. locations. For more detailed assignment planning, AIRINC's tax data and advisory support can help mobility teams understand how tax changes affect cost projections, tax equalization, and the employee experience.

Global Tax Rates