PENNSYLVANIA - If you glanced at your first pay stub of 2026 and noticed the numbers look different, you aren't imagining things. While the federal government has adjusted its brackets for inflation, Delaware has gone a step further with a significant overhaul of its own tax code. For the first time in years, the state is shifting how it taxes income, resulting in a "fairness" adjustment that likely puts more money in the pockets of moderate earners while asking more from high earners.
From the launch of new family benefits to the adjustment of the state's tax brackets, here is exactly how your paycheck is changing in 2026.
1. The "Fairness" Tax Overhaul
The biggest news for 2026 is a structural change to Delaware’s Personal Income Tax, designed to lower the burden on working families.
- The News: Effective for the 2026 tax year, the state has expanded its lower tax brackets.
- The Change: If you earn under $60,000, you may see a slight boost in your take-home pay. The state has added new, lower-rate brackets for income up to this threshold.
- The Flip Side: If you are a high earner (typically taxable income over $150,000), the state has introduced new top-tier brackets with higher rates. Check your withholding to ensure you aren't underpaying throughout the year.
2. Paid Family Leave Benefits (And Costs)
The "Delaware Cares" era has officially begun.
- The News: While deductions began last year, January 1, 2026, marks the date that benefits officially go live.
- The Cost: You will continue to see a line item for Paid Family & Medical Leave (PFML) on your stub. Employers can deduct up to 50% of the cost from your paycheck.
- For most employees, this deduction is capped at 0.4% of wages (half of the total 0.8% premium).
- The Upside: Unlike last year, you can now actually use this benefit. Eligible employees can now claim up to 12 weeks of paid leave for parental bonding or serious health conditions.
3. The Wilmington Wage Tax (Steady)
If you work or live in the state’s largest city, your local tax bite remains consistent.
- The Rate: The City of Wilmington’s Earned Income Tax remains at 1.25%.
- The Reminder: This applies to everyone who works within city limits, regardless of where they live. If you recently started a job in Wilmington but live in Newark or Middletown, double-check that this 1.25% is being deducted. If not, you will owe a lump sum next April.
4. Federal "Inflation" Adjustments
Your federal withholding might look lower this year, even if you didn't get a raise.
- Standard Deduction Hike: The IRS has raised the standard deduction to $16,100 for singles and $32,200 for married couples. This means less of your paycheck is subject to federal tax upfront.
- Social Security Cap: High earners will pay Social Security taxes longer this year. The "wage base" has jumped to $184,500. If you earn more than this, the 6.2% tax will stop only after you hit that total; if you earn less, you pay it on every dollar.
5. The $15 Minimum Wage Milestone
For hourly workers, the floor has officially been raised.
- The Change: As of January 1, 2026, Delaware’s minimum wage has increased to $15.00 per hour.
- The Impact: If you were previously earning the 2025 rate of $13.25, you should see an immediate jump in your gross pay. This increase also affects overtime calculations (now based on $22.50/hr), so check your pay stub carefully to ensure your rate was updated on time.
Action Plan: What to Check This Friday
- Hourly Workers: Verify your hourly rate is listed as at least $15.00.
- High Earners ($150k+): Review your state withholding to ensure you are covering the new, higher tax bracket rates.
- New Parents: Bookmark the Delaware Department of Labor's portal now that PFML benefits are live and claimable.
