Colorado TABOR Note:Colorado's Taxpayer's Bill of Rights (TABOR) can temporarily reduce the flat rate below 4.4% in high-revenue years. Check the Colorado Department of Revenue each tax year for any rate adjustments.
Enter Your Pay DetailsFree · No signup
$
Deductions & Adjustments
% / yr
$
$
Colorado's 4.4% Flat Tax on Federal Taxable Income: Why Denver Workers Pay Less State Tax Than Virginia or Illinois Residents at the Same Salary
Colorado calculates state tax from your federal taxable income, the same base the IRS uses after the $14,600 standard deduction (for single filers). States like Virginia start from a lower $8,000 deduction, and Illinois taxes near-gross income. That means a $65,000 Colorado salary produces $2,218 in state tax, compared to $3,020 in Virginia and $3,080 in Illinois. The 4.4% rate on the same $50,400 taxable base is simply lower than Virginia's effective 5.3% or Illinois's effective 4.7%.
CO Taxable Income = Gross Pay − $14,600 (single) or $29,200 (MFJ)
CO State Tax = CO Taxable Income × 4.4%
Gross Salary
CO Taxable
CO Tax (4.4%)
VA Tax (est.)
IL Tax (est.)
$30,000
$15,400
$678
$1,008
$1,348
$50,000
$35,400
$1,558
$2,198
$2,338
$65,000
$50,400
$2,218
$3,020
$3,080
$80,000
$65,400
$2,878
$3,883
$3,823
$100,000
$85,400
$3,758
$5,033
$4,813
$150,000
$135,400
$5,958
$7,908
$7,288
VA tax uses $8K single deduction + 4-bracket progressive up to 5.75%. IL tax uses $2,775 personal exemption × 4.95% flat.
Colorado TABOR and the Denver Occupational Privilege Tax: Two Colorado-Specific Items That Affect Your Actual Take-Home Beyond the 4.4% Rate
Colorado's 4.4% rate is not always the final state rate on your paycheck. TABOR, the Taxpayer's Bill of Rights, can trigger a temporary rate reduction when state revenues grow faster than a formula tied to inflation plus population growth. In recent years, TABOR refunds have been issued to taxpayers, effectively lowering the amount collected. Additionally, Denver, Aurora, and several other municipalities charge an Occupational Privilege Tax (OPT): a flat $5.75/month per employee in Denver for those earning more than $500/month. This is not a percentage, it is a fixed fee separate from the 4.4% state tax.
Item
Rate / Amount
Who It Affects
Included Here?
CO State Income Tax
4.4% flat
All CO residents
Yes
TABOR Rate Reduction
Varies by year
All taxpayers (as refund)
No, check CDOR annually
Denver OPT (employee)
$5.75/month
Employees earning $500+/mo in Denver
No
Denver OPT (employer)
$4.00/month
Denver employers
No
Aurora OPT
$2.00/month
Employees in Aurora
No
Glendale OPT
$10.00/month
Employees in Glendale
No
Five Colorado Paycheck Calculation Errors That Produce Wrong Take-Home Estimates
Applying 4.4% to gross income instead of federal taxable income
Colorado's 4.4% applies after the federal standard deduction ($14,600 single / $29,200 MFJ). On a $65,000 salary, the CO taxable base is $50,400, not $65,000. Using gross produces $2,860 instead of the correct $2,218, a $642 overstatement.
Not subtracting pre-tax 401(k) contributions from CO taxable income
Colorado conforms to federal treatment of traditional 401(k) contributions. A 5% contribution on $65,000 reduces both federal and Colorado taxable income by $3,250, saving roughly $143 in state tax, a real benefit that the calculator reflects when you enter your contribution percentage.
Forgetting the Denver Occupational Privilege Tax if you work in the city
Denver employees earning over $500/month pay $5.75/month in OPT ($69/year) that is withheld separately from state income tax. If your pay stub shows an unexplained deduction, it may be the OPT, not a state tax error.
Assuming TABOR will always reduce your rate below 4.4%
TABOR refunds are triggered only in high-revenue years. Not every year qualifies. Budget planning should use 4.4% as the baseline rate and treat any TABOR refund as a windfall rather than a guaranteed reduction.
Using married standard deduction for head of household filers
Colorado uses the federal standard deduction amounts. HOH filers use $21,900, not the $29,200 married amount, and not the $14,600 single amount. Using the wrong deduction produces a taxable income that is off by up to $7,300.
Frequently Asked Questions
Colorado has a flat income tax rate of 4.4% for 2025. This rate has been in effect since 2022 when it was reduced from 4.55%. Colorado's TABOR (Taxpayer's Bill of Rights) constitutional amendment can temporarily reduce the rate further in years when state revenues exceed the growth cap, watch for any TABOR refund announcements from the Colorado Department of Revenue each year.
Source for the $176,100 Social Security wage base and 6.2% employee FICA rate for 2025.
HR
Hassaan Rasheed
Developer and Researcher, CalculatorFlux
Researches and verifies the formulas, methodology, and source data behind each calculator on CalculatorFlux. All tools are built and checked against the cited references before publication.
Last updated: June 2026
Colorado Tax Rates 2025
Tax
Rate / Amount
CO State Income Tax
4.4% (flat)
CO Taxable Base
Federal taxable income
Denver OPT (employee)
$5.75/month
Social Security
6.20%
Medicare
1.45%
SS Wage Base 2025
$176,100
Federal Std Ded. (single)
$14,600
401(k) Limit 2025
$23,500
Pro Tip
Compared to California (up to 13.3%) or New York (up to 10.9%), Colorado's 4.4% flat rate saves a $100,000 earner $3,700–$9,000 per year in state tax. Remote workers relocating from high-tax states often see the single largest pay increase they've had in years, without a raise.