The late pop icon topped the annual list with a record-breaking income of 825 million US dollars (£677 million) this year.
This was largely due to the 750 million US dollars (£615 million) sale of Jackson's half in the Sony/ATV Music Publishing catalogue, complete with a library of Beatles tracks.
Jackson, who passed away in 2009 at the age of 50, has topped the annual list for deceased celebrities every year since his death - apart from in 2012 when he came second to Hollywood star Elizabeth Taylor.
The next closest contender on the list is Peanuts creator and cartoonist Charles M Schulz, who has earned 48 million US dollars (£39.4 million) in the last year.
New additions to this year's list include music stars David Bowie and Prince, both of whom passed away in the first half of 2016.
Bowie is ranked at 11th place with an estimated income of 10.5 million US dollars (£8.6 million) following his death at age 69 in January.
With an estimated income of 25 million US dollars (£20.5 million), Prince, who died at age 57 in April, has made his debut on the list in fifth place.
American golfer Arnold Palmer is third on the list, Elvis Presley is in fourth place and singer-songwriter Bob Marley is sixth.
Forbes estimated the pre-tax income of personalities from October 1 2015 through to October 1 2016 from a variety of sources before taking away expenses for agents, managers and lawyers.
:: The full list of top-earning dead celebrities for 2016.
1. Michael Jackson - 825 million dollars (£677 million)
2. Charles M Schulz - 48 million dollars (£39.4 million)
3. Arnold Palmer - 40 million dollars (£32.8 million)
4. Elvis Presley - 27 million dollars (£22.2 million)
5. Prince - 25 million dollars (£20.5 million)
6. Bob Marley - 21 million dollars (£17.2 million)
7. Theodor "Dr. Seuss" Geisel - 20 million dollars (£16.4 million)
8. John Lennon - 12 million dollars (£9.8 million)
9. Albert Einstein - 11.5 million dollars (£9.4 million)
10. Bettie Page - 11 million dollars (£9 million)
11. David Bowie - 10.5 million dollars (£8.6 million)
12. Steve McQueen - 9 million dollars (£7.4 million)
13. Elizabeth Taylor - 8 million dollars (£6.6 million)