Detroit
Detroit's city income tax is the local rule here. Employers with a location in Detroit or doing business there withhold 2.4% from Detroit residents wherever they work, and 1.2% from nonresidents whose predominant place of employment is Detroit, on their Detroit wages only. Michigan doesn't tax residential or commercial cleaning (the Use Tax Act does reach linen, mop, or mat service under agreements of at least 5 days), so the city's mark on your books is on payroll.
For a cleaning company in Detroit, where each employee lives matters, and so does where they earn the largest share of their pay. This page covers the city income tax and who it's withheld from, Michigan's sales tax position on cleaning, the state wage increase in January, and what it means for your books. Statewide payroll registration is on my Michigan page.
The Michigan Department of Treasury administers Detroit's income tax. Its 2026 withholding guide (Form 5469) sets the rates at 2.4% for residents and 1.2% for nonresidents and values each exemption at $600 a year. Every employer with a location in Detroit or doing business in Detroit must withhold. Withholding applies to all Detroit residents wherever they work, and to nonresidents whose predominant place of employment is Detroit, meaning the Michigan income-tax city where they earn their largest share of pay, at least 25% of total compensation. For those nonresidents, withholding is based only on wages earned in Detroit. Treasury's Detroit withholding page says there's no separate registration process for City of Detroit withholding.
Source: Michigan Department of Treasury, Detroit Employer Withholding Tax
Residential and commercial cleaning aren't taxable in Michigan. The Use Tax Act does reach laundering or cleaning textiles under an agreement of at least 5 days, such as linen, mop, or mat service, unless the textiles are used by a restaurant or retail sales business (MCL 205.93a(1)(d)). More on that is on my Michigan sales tax page.
Source: Michigan Legislature, Use Tax Act, Act 94 of 1937, MCL 205.93a(1)(d)
This page doesn't cover a Detroit minimum wage. Michigan's rate has been $13.73 an hour since January 1, 2026, and the Department of Labor and Economic Opportunity lists $15.00 effective January 1, 2027.
Source: Michigan Department of Labor and Economic Opportunity, Wage and Hour Division, Minimum Wage
Detroit withholding turns on two facts about each employee: where they live, and whether Detroit is where they earn the largest share of their pay. A spreadsheet of home addresses somebody updates when they remember. It's the worst place to keep that, because a move changes the rate and nobody tells the spreadsheet. I'd rather see residency on the employee record in payroll, with Detroit tax withheld going to its own liability account. Labor gets booked at the wage actually paid, and my payroll page shows how that's set up.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the city withholding recorded and separate; whether an employee counts as a resident or has Detroit as their predominant place of employment, and how it gets reported, are questions for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Detroit and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Detroit's tax follows the employee, so the books need to know who's a resident and who earns the largest share of their pay in the city. City tax withheld goes to its own liability account, apart from state withholding, and labor is recorded at the wage actually paid. Book a short call below and tell me how your crews are set up.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
Cleaning in Detroit with crews who live on both sides of the city line? Tell me how you keep track of it now. The first conversation doesn't cost anything.
