Pennsylvania paycheck taxes at a glance
| Income tax on wages | Flat 3.07% |
|---|---|
| PA unemployment (0.07%) | 0.07% of wages |
| 401(k) contributions | Taxed by the state (not deductible from state wages) |
| Minimum wage (2026) | $7.25 an hour (same as the federal minimum; $2.83 cash wage for tipped workers) |
Local taxes: Most Pennsylvania municipalities and school districts levy a local earned income tax (often 1%–2%; Philadelphia’s wage tax is higher), plus a Local Services Tax of up to $52 a year.
Example: a $81,500 salary in Pennsylvania
The median household income in Pennsylvania is about $81,473 (2025 data). Here's what one earner with that salary, paid every two weeks, filing single with no pre-tax deductions, would see on each paycheck in 2026:
| Gross pay | $3,134.62 |
|---|---|
| Federal income tax | −$350.00 |
| Social Security | −$194.35 |
| Medicare | −$45.45 |
| Pennsylvania income tax | −$96.23 |
| PA unemployment (0.07%) | −$2.19 |
| Take-home pay | $2,446.39 |
That's $63,606 a year in take-home pay, or 22% of gross pay going to taxes.
Take-home pay by salary in Pennsylvania
Single filer, paid biweekly, standard W-4, no pre-tax deductions:
| Salary | Per paycheck | Per year | State taxes | Total tax rate |
|---|---|---|---|---|
| $40,000 | $1,271.69 | $33,064 | $1,256 | 17.3% |
| $60,000 | $1,865.62 | $48,506 | $1,884 | 19.2% |
| $80,000 | $2,407.62 | $62,598 | $2,512 | 21.8% |
| $100,000 | $2,924.62 | $76,040 | $3,140 | 24% |
| $150,000 | $4,195.42 | $109,081 | $4,710 | 27.3% |
| $200,000 | $5,486.42 | $142,647 | $6,280 | 28.7% |
What changed for 2026
- Philadelphia's wage tax fell on July 1, 2026, to 3.735% for residents (from 3.74%) and 3.425% for nonresidents (from 3.43%).
Pennsylvania pay rules worth knowing
- Pennsylvania's Wage Payment and Collection Law requires employers to pay wages on time as agreed and to give you your last paycheck when employment ends. You can report a violation to the Department of Labor & Industry's Bureau of Labor Law Compliance.
How Pennsylvania’s state tax works
Pennsylvania employers withhold a flat 3.07% of compensation, and the same rate applies at every income level.
Two things make Pennsylvania different from other flat-tax states:
- 401(k) contributions are taxed. A traditional 401(k) still lowers your federal income tax, but Pennsylvania taxes the contribution now. That trims the state savings from pre-tax retirement contributions to zero. The calculator handles this automatically when you enter a 401(k) percentage.
- Low-income relief comes at filing. Tax Forgiveness wipes out the state tax for an unmarried filer with eligibility income up to $6,500 ($13,000 married), plus $9,500 for each dependent child, and gives partial relief a little above those limits. It isn’t automatic: you claim it on PA Schedule SP with your return. The calculator applies it to your estimate.
Local earned income tax (EIT)
Most Pennsylvania municipalities and school districts levy a local earned income tax, and under Act 32 employers withhold it for most workers. You have two possible rates, and the rule for choosing one is the most important thing to understand about PA local tax:
- your resident rate, which combines your home municipality’s and school district’s rates, and
- the nonresident rate of the place where you work.
Your employer withholds the higher of the two. So moving from a low-tax suburb to a high-tax one changes your withholding even if you keep the same job. Working in a place with a high nonresident rate can also raise it even when you live somewhere cheap.
Philadelphia is the big exception. It charges its own wage tax: 3.735% for residents and 3.425% for nonresidents who work in the city, as of July 1, 2026. Employers withhold the resident rate for employees who live and work in Philadelphia.
To include local tax in your estimate, enter your combined rate in the Local income tax rate field above. Your employer’s payroll office or your tax collector can confirm the exact rate for your address.
The Local Services Tax
On top of the EIT, the municipality where you work can charge a Local Services Tax of up to $52 a year. It usually shows up as a small deduction spread across your paychecks. If you work for two employers in different places, you shouldn’t pay more than $52 in total. The FAQ explains the low-income exemption.
Pennsylvania’s unemployment withholding
Pennsylvania employees pay a share of unemployment insurance: 0.07% of every dollar of gross wages, with no wage base cap. On a $60,000 salary that’s $42 a year.
Use the income tax calculator for your full-year federal tax and the 401(k) calculator to compare traditional and Roth contributions, keeping in mind that Pennsylvania taxes both the same way going in.
Estimates only. Your employer’s payroll system and your W-4 determine your actual paycheck.
Sources
- PA Department of Labor & Industry: Minimum Wage Act
- PA Department of Labor & Industry: Labor Law Compliance
- PA Department of Revenue: Employer Withholding
- PA Department of Revenue: Gross Compensation (401(k) and Section 125)
- PA DCED: Local Withholding Tax FAQs
- PA DCED: Local Services Tax
- City of Philadelphia: Wage Tax (employers)
- City of Pittsburgh: Tax Descriptions
- Census Bureau: Household Income in States and Metropolitan Areas, 2025
- pa.gov
- pa.gov
- IRS Publication 15-T (federal withholding)
Frequently asked questions
Does Pennsylvania tax 401(k) contributions?
Yes. Employee contributions to a 401(k) aren't excluded from Pennsylvania taxable compensation, so you pay the 3.07% state tax on them now. Qualified Section 125 health insurance contributions are exempt, so those still lower your Pennsylvania taxable wages.
What is the Local Services Tax?
The LST is a flat annual tax charged by the municipality where you work, capped at $52 a year in total. Employers usually split it across paychecks. If the LST where you work is more than $10, the municipality must exempt you if your total income from that municipality is under $12,000 for the year.
I live in a neighboring state. Do I pay Pennsylvania income tax?
Not on wages if you live in Indiana, Maryland, New Jersey, Ohio, Virginia or West Virginia. Pennsylvania has reciprocal agreements with those six states, so your employer withholds your home state's tax instead. Local earned income tax and the Local Services Tax can still apply where you work.
How much is Pittsburgh's local tax?
Pittsburgh residents pay 3% earned income tax in total, 1% to the city and 2% to the Pittsburgh school district. People who work in the city but live outside Pennsylvania pay 1%. Pittsburgh's Local Services Tax is $52 a year, with an exemption for people earning less than $12,000 in the city.
Does Pennsylvania have unemployment tax on my paycheck?
Yes, a small one. Employees pay 0.07% of gross wages, or 70 cents per $1,000, with no wage cap. It was the same in 2025.
Facts verified November 6, 2026. Estimates only; your employer's payroll system and your W-4 determine your actual withholding.