Is Massachusetts worth the high cost of living?

Massachusetts ranks among the top 5 states in median household income ($96,505), has the nation's best healthcare system and top universities. The new 4% surtax on income over $1M makes it less attractive for very high earners, but middle-class families benefit from strong public services and economic opportunity.

What is the Massachusetts millionaires tax?

Starting 2023, Massachusetts imposes a 4% surtax on taxable income above $1 million, on top of the 5% flat income tax, creating a 9% effective rate on income over $1M.

Living in Massachusetts: Income, Housing, Taxes & Cost of Living (2026)

Massachusetts at a Glance

Metric	Value	National Rank
Population (2024)	7.0 million	16th
Median household income	$96,505	2nd (behind Maryland)
Median home price	$580,000	3rd highest
Cost of living index	135	Very high
State income tax	5% flat (+ 4% surtax on $1M+)	Above average
Sales tax	6.25%	Average
Property tax (effective rate)	1.15%	Above average

Income by City/Area

City/Area	Median Income	Key Industries
Boston (metro)	$94,000	Biotech, finance, education, healthcare
Cambridge	$113,000	Tech, biotech (Kendall Square)
Newton	$165,000	Professional services
Worcester	$63,000	Healthcare, education
Springfield	$45,000	Healthcare, defense
Cape Cod/Islands	$72,000	Tourism, healthcare
Lowell	$60,000	Manufacturing, tech

Housing: Boston Metro is the Story

Area	Median Home Price	Median Rent (2BR)	Price-to-Income
Boston (city proper)	$720,000	$3,200	7.7x
Cambridge	$850,000	$3,400	7.5x
Newton/Brookline	$1,100,000	$2,800	6.7x
Greater Boston (suburbs)	$600,000	$2,400	5.5x
Worcester	$350,000	$1,600	5.6x
Springfield	$230,000	$1,250	5.1x
Cape Cod	$575,000	$2,000	8.0x
New Bedford/Fall River	$380,000	$1,400	5.8x

Boston ranks among the most expensive housing markets in the US (top 5).

Tax Breakdown

Income	Federal	MA State Tax	FICA	Take-Home Rate
$75,000	$8,760	$3,750	$5,738	75.7%
$100,000	$13,615	$5,000	$7,650	73.7%
$150,000	$25,915	$7,500	$10,878	70.5%
$1,200,000	$418,327	$68,000 (includes 4% surtax)	$11,502	58.5%

The 4% millionaire’s surtax pushes the effective rate on income above $1M to 9%.

Cost of Living Reality Check

Category	Massachusetts	National Average
Housing	180	100
Groceries	110	100
Healthcare	115	100
Transportation	110	100
Overall	135	100

Massachusetts Pros and Cons

Financial Pros	Financial Cons
2nd highest median income	Extremely high housing costs (Boston metro)
World-class healthcare (ranked #1)	4% surtax on income over $1M
Biotech/tech economy (high paying jobs)	135 COL index overall
Excellent public schools	Long, expensive winters (heating costs)
Strong worker protections	Traffic congestion (Boston metro)