How Pennsylvania taxes a paycheck
Pennsylvania adds two income taxes to the federal income tax, Social Security and Medicare that the federal take-home pay calculator explains: a state tax at one flat rate and a local earned income tax that depends on where you live and work. For wages paid in 2026:
take-home = W − pre-tax − federal − FICA − Pennsylvania tax − local EIT
- Pennsylvania income tax is 3.07% of taxable compensation, the rate the Department of Revenue lists from 2004 to the present. There are no brackets, no standard deduction and no personal exemption, so the filing status you choose changes the federal line but not this one.
- Taxable compensation is your pay minus qualifying cafeteria-plan premiums for health coverage. A 401(k) deferral is not subtracted: the Department of Revenue's guide says employee contributions to any retirement plan are always taxable as compensation. The guide excludes only cafeteria-plan contributions for hospitalization, sickness, disability or death coverage (and supplemental unemployment or strike benefits); it treats all other benefits as taxable. This calculator subtracts the whole Benefits / yr amount from Pennsylvania compensation, so on this page enter only those premiums there; a pre-tax benefit of another kind, such as dependent care, would understate Pennsylvania tax and local EIT.
- Local earned income tax (EIT) is a percentage of the same compensation. Under Act 32 your employer compares two rates, the total resident EIT rate where you live and the non-resident EIT rate where you work, and withholds the higher one. Enter both from the Department of Community and Economic Development's address search; the calculator applies the higher. Both start at 0%, so no local tax is included until you enter them.
Philadelphia is the exception. It does not use the Act 32 comparison: employers withhold Philadelphia's own resident rate from people who live there and its non-resident rate from people who work there, paid to the city's Department of Revenue. This page does not have Philadelphia's rates. The Local Services Tax, a flat yearly amount some municipalities charge people who work there, and credits such as Tax Forgiveness for lower incomes are not included either.
Like the federal take-home calculator, this page figures tax for one earner with one job. Married filing jointly here assumes your spouse has no wages, so the $32,200 federal joint standard deduction and the joint brackets all go to one salary, and for a couple who both work federal income tax is underestimated: at $85,000 each, the page shows $5,840.00 of federal tax on one salary, against $9,870.00 as that salary's half of the couple's joint tax. The Pennsylvania line is not affected: a flat rate with no joint brackets gives each salary $2,609.50 either way. The Additional Medicare Tax threshold for a joint return also counts the couple's combined wages, which are not added up here.
The calculator does not check the yearly limit the IRS sets on 401(k) contributions, which for 2026 is $24,500, plus $8,000 of catch-up from age 50, or $11,250 instead in a year you turn 60 to 63. Whatever you enter in the 401(k) field is treated as a pre-tax deferral, so an amount above the limit makes federal income tax look lower than it will be. The Pennsylvania and local lines are not affected, because Pennsylvania taxes 401(k) money as pay at any amount.
Worked example: $85,000 in Pennsylvania, paid biweekly
- Pennsylvania tax: 3.07% × $85,000 = $2,609.50.
- Local EIT, using the rates in DCED's first Act 32 example (0.5% where you live, 1% where you work): the higher is 1%, so 1% × $85,000 = $850.00.
- Federal income tax $9,870.00, Social Security $5,270.00 and Medicare $1,232.50, the same as in any state.
- Take-home pay: $85,000 − $19,832.00 = $65,168.00 a year, or $2,506.46 on each of 26 paychecks. Without a local rate entered, the page shows $2,539.15 a paycheck.
In DCED's second example the resident rate is 1.6% and the work location rate 1.3%; the resident rate is higher, so 1.6% applies and local EIT on the same salary is $1,360.00.
What is different about a Pennsylvania paycheck
A 401(k) contribution does not lower Pennsylvania tax
Putting $6,000 into a traditional 401(k) lowers federal income tax from $9,870.00 to $8,550.00, but Pennsylvania tax stays at $2,609.50 and local EIT at $850.00, because Pennsylvania counts the deferral as pay.
Cafeteria-plan premiums do
The same $6,000 paid as health premiums through a qualifying cafeteria plan lowers Pennsylvania compensation to $79,000.00 and Pennsylvania tax by $184.20.
Filing status does not matter
Filed jointly, the same salary pays $2,609.50 of Pennsylvania tax, exactly as a single filer does; only the federal line changes, to $5,840.00.
Frequently asked questions
Which local EIT rate applies to me?
The higher of two: the total resident rate of the municipality and school district where you live, and the non-resident rate of the municipality where you work. If you live outside Pennsylvania, your resident rate is 0% and the work location rate applies. Your employer uses the residency certification form you filled in to look both up.
Where do I find my EIT rates?
The Department of Community and Economic Development's address search gives the PSD code, the EIT rates and the tax collector for any Pennsylvania address. Rates differ from one municipality to the next, which is why the calculator asks for them instead of assuming one.
Why does my 401(k) not lower my Pennsylvania tax?
Pennsylvania does not follow the federal exclusion for elective deferrals. Employee contributions to a retirement plan are taxable compensation when you earn them, for the state tax and for local EIT alike.
I live or work in Philadelphia. Is the local line right?
Not as it stands. Philadelphia withholds its own resident or non-resident rate instead of comparing two EIT rates under Act 32, and this page does not have those rates. The Pennsylvania state line still applies.
We are married, file jointly and both work. Is the result right for us?
Not for federal income tax, which is understated by $4,030.00 for each $85,000 salary. The Pennsylvania and local lines are right for each of you, because both are flat percentages of each person's own pay.
Which year do these figures apply to?
Wages paid in 2026: the 3.07% Pennsylvania rate, which has not changed since 2004, and the 2026 federal figures. Local EIT rates are whatever you enter.
Sources
- Pennsylvania Department of Revenue, Personal Income Tax Rates
- Pennsylvania Department of Revenue, Personal Income Tax: deductions, credits and exclusions
- Pennsylvania Department of Revenue, Personal Income Tax Guide: Gross Compensation (retirement contributions)
- Pennsylvania DCED, FAQ: Act 32, Earned Income Tax Collection Reform
- Pennsylvania DCED, Local Withholding Tax FAQs: EIT rates, Philadelphia and the Local Services Tax
- IRS, Revenue Procedure 2025-32: 2026 federal tax rate tables and standard deduction
- IRS, Publication 15 (2026): Social Security and Medicare rates and 401(k) deferrals
- IRS, Publication 15-B (2026), Table 2-1: cafeteria plan benefits
- Social Security Administration, Contribution and Benefit Base
- IRS, Questions and answers for the Additional Medicare Tax
- IRS, Notice 2025-67: 2026 limits for 401(k) deferrals and catch-up contributions
- IRS, Retirement topics: Catch-up contributions