What is the Pennsylvania local Earned Income Tax and how do I know if it applies to me?

Most Pennsylvania municipalities and school districts levy a local Earned Income Tax (EIT) on wages earned within their jurisdiction. Rates vary: Philadelphia 3.75% for residents; Pittsburgh 3% for residents; most suburban municipalities 1%–2% combined (municipality + school district). Your employer should register with the appropriate local tax collector and withhold the EIT from your paycheck automatically. Residents pay their municipality's rate even if they work elsewhere, and non-residents pay the rate of their work municipality (or their residence rate, whichever is lower, under tax reciprocity rules). The Pennsylvania Taxpayer Information Center's website lets you look up your exact rate by municipality. If you move to a new Pennsylvania address, notify HR so withholding is adjusted.

What is Philadelphia's Wage Tax and who pays it?

Philadelphia imposes a Wage Tax on all wages paid for work performed in Philadelphia. The rate for 2025 is 3.75% for Philadelphia residents and 3.44% for non-residents who work in Philadelphia. This is separate from Pennsylvania state income tax (3.07%). A Philadelphia resident who works in the city pays both: 3.07% state + 3.75% city = 6.82% combined state+local on wages. A non-resident commuting into Philadelphia for work pays 3.44% Philadelphia Wage Tax on those earnings plus their own state's income tax (with a credit for taxes paid to PA). The Philadelphia Wage Tax is among the highest municipal wage taxes in the nation. Philadelphia employers are required to withhold it automatically.

Does Pennsylvania have reciprocity agreements with neighboring states?

Yes. Pennsylvania has reciprocal tax agreements with Indiana, Maryland, Michigan, New Jersey, Ohio, Virginia, West Virginia, and Wisconsin. Under these agreements, residents of those states who work in Pennsylvania pay income tax only to their home state — not to Pennsylvania. Similarly, Pennsylvania residents working in any of those states pay Pennsylvania income tax only. If you're a New Jersey resident working in Pennsylvania (or vice versa), you file only one state income tax return — your home state. Reciprocity doesn't apply to Philadelphia Wage Tax, which is a city-level tax outside the state reciprocity framework — a NJ resident working in Philadelphia pays Philadelphia Wage Tax (3.44%) in addition to NJ state income tax.

What is Pennsylvania's SUI employee contribution on my pay stub?

Pennsylvania is one of the few states with an employee SUI (State Unemployment Insurance) contribution. The rate is 0.07% on the first $10,000 of wages per year — a maximum of $7 annually, deducted at $0.54–$0.70 per biweekly paycheck until the $10,000 wage base is hit (typically after 3–4 months). This is the smallest employee payroll tax in the country. It appears as 'PA SUI' or 'PA UC' on your pay stub. The modest amount often raises questions from new employees unfamiliar with the line item — the total maximum annual deduction is $7, which is genuinely not a meaningful financial burden.

How does Pennsylvania treat retirement income for income tax purposes?

Pennsylvania is extremely favorable for retirees — one of the best in the Northeast. All Social Security benefits are exempt. All distributions from employer pension plans (401(k), 403(b), 457) are exempt if the recipient has reached 'normal retirement age' under the plan. IRA distributions are exempt once the taxpayer reaches 59½ if they made contributions while Pennsylvania residents. Military retirement pay is exempt. Essentially, most retirement income streams common in the United States are exempt from Pennsylvania income tax. This makes Pennsylvania very attractive for middle-income retirees, particularly those with meaningful pension or 401(k) income who might face significant state tax in New York, New Jersey, or Maryland.

Pennsylvania Paycheck Calculator 2026

Last updated: May 2026 · Data: Tax Foundation, IRS Publication 15-T, Pennsylvania Dept. of Revenue

What makes Pennsylvania different: Pennsylvania has one of the lowest flat income tax rates among states that do tax income at 3.07% — no deductions, no exemptions, no brackets. However, many Pennsylvania municipalities levy a local Earned Income Tax (EIT) of 1%–3.8% on top of state income tax. Philadelphia's EIT is 3.75% for residents, making the combined state+local rate for Philadelphia residents 6.82% — close to high-bracket states like New York.

Pennsylvania Paycheck Calculator

Pre-filled with Pennsylvania's flat 3.07% income tax rate and applicable deductions.

Annual Gross Salary

Pay Frequency

Filing Status

Take-Home / Paycheck

$2,263

vs. $2,885 gross

Net Annual

$58,839

from $75,000 gross

Total Deductions

$16,161

per year

Effective Total Rate

21.5%

all taxes combined

Annual Deduction Breakdown

Gross Income+$75,000

Federal Income Tax(eff. 10.8%)−$8,114

Social Security (6.2%)−$4,650

Medicare (1.45%)−$1,088

Pennsylvania State Tax(eff. 3.1%)−$2,303

PA SUI−$7

Net Take-Home$58,839

Take-home Federal tax FICA State taxes

Federal standard deduction applied: $15,000 (single) / $30,000 (MFJ). State deductions applied per Pennsylvania rules. Estimate only; does not include 401(k), HSA, or benefit deductions.

Pennsylvania Paycheck & Tax Guide 2026

Pennsylvania's income tax is elegant in its simplicity: 3.07% flat on all taxable income, no deductions, no exemptions, no brackets. Whether you earn $30,000 or $3,000,000, Pennsylvania takes exactly 3.07 cents from every dollar of taxable income. This is one of the lowest flat rates in the nation and is significantly simpler to calculate than the bracket systems in neighboring New York and New Jersey.

The catch is Pennsylvania's local Earned Income Tax (EIT) system. Pennsylvania allows municipalities and school districts to levy local income taxes on wages, and most do. Philadelphia charges the highest rate at 3.75% for city residents (1.5% for non-residents working in the city). Pittsburgh proper charges 3% for residents. Most suburban municipalities and school districts charge combined rates of 1%–2%. For a Philadelphia resident, combining state (3.07%) and city EIT (3.75%) creates an effective local+state rate of 6.82% — higher than most New York State residents pay.

Pennsylvania has no standard deduction and no personal exemption — unlike most states and the federal system, Pennsylvania taxes gross income (with limited specific deductions) rather than adjusted gross income. Unemployment compensation received is taxable in Pennsylvania (unlike many states that exempt it). Capital gains are taxed at the same flat 3.07% rate as ordinary income.

Pennsylvania also has a small employee SUI (State Unemployment Insurance) contribution of 0.07% on the first $10,000 of wages — a minimal $7/year maximum — that appears on pay stubs.

Note: Philadelphia also has a Wage Tax (separate from EIT, functionally similar) at 3.75% for residents and 3.44% for non-residents — if you work in Philadelphia, check whether you're paying the EIT or Wage Tax, as only one applies.

Pennsylvania Income Tax Data: 2025/2026

Data Point	Value	Notes
Income Tax Type	Flat Rate
Flat Tax Rate	3.07%	Applies to all taxable income
State Standard Deduction	None	Single filer
Personal Exemption	None	Per filer
State SUI Employee Rate	0.07%	Applied to first ~$10,000 of wages
Federal Standard Deduction	$15,000	Single filer 2025; applies in all states
Social Security Tax	6.2%	Up to $176,100 wage base (2025)
Medicare Tax	1.45%	No wage base; +0.9% above $200,000

Source: Tax Foundation, IRS Publication 15-T (2025), Pennsylvania Department of Revenue. Last updated: May 2026.

Pennsylvania Take-Home Pay Examples (2025)

Single filer, standard federal deduction ($15,000), standard Pennsylvania deductions. Excludes voluntary deductions (401k, benefits).

Gross Salary	Federal Tax	FICA	State Tax	SDI/SUI	Net Annual	Net/Month	Eff. Rate
$50,000	$3,962 7.9%	$3,825	$1,535 3.1%	$7	$40,672	$3,389	18.7%
$75,000	$8,114 10.8%	$5,738	$2,303 3.1%	$7	$58,839	$4,903	21.5%
$100,000	$13,614 13.6%	$7,650	$3,070 3.1%	$7	$75,659	$6,305	24.3%

Worked Example: $75,000 Salary in Pennsylvania

Gross annual salary$75,000

− Federal income tax (fed. taxable income: $60,000)−$8,114

− Social Security (6.2%)−$4,650

− Medicare (1.45%)−$1,088

− Pennsylvania income tax (3.07% flat)−$2,303

− PA SUI (0.07%)−$7

Net take-home (annual)$58,839

Monthly take-home$4,903

Bi-weekly paycheck$2,263

Effective total rate21.5%

More Pennsylvania Calculators

All three financial calculators for Pennsylvania in one place

Pennsylvania Financial Hub

Pennsylvania Mortgage Calculator

Median home: $280,000 · 1.43% prop tax

Open

Pennsylvania Sales Tax Calculator

Coming soon

Pennsylvania Financial Hub

Income, sales tax, property tax & cost of living overview

Open

Frequently Asked Questions: Pennsylvania Paycheck Taxes

Correct — Pennsylvania is one of the few flat-tax states with no standard deduction and no personal exemption. You pay 3.07% on essentially all wages, salaries, tips, and most other income. The state does allow certain specific deductions: unreimbursed employee business expenses (though narrower than federal), net losses from self-employment, contributions to health insurance premiums if paid with after-tax dollars, and some others — but the standard household W-2 employee with no unusual expenses takes zero deductions. This means if you earn $60,000, your PA state tax is $60,000 × 0.0307 = $1,842. No adjustment needed. It's genuinely that simple for most employees.

Sources & Methodology

Compare with Nearby States

New York All States →

Paycheck Calculator All States Index Salary Calculator Tax Calculator