Pennsylvania has the simplest income tax arithmetic in the United States. Take your salary. Multiply by 3.07%. That is your state income tax.
There is no standard deduction to subtract first. There is no personal exemption. There are no brackets to walk. On $85,000 the state takes $2,610 — which is 3.07% of $85,000, to the cent.
Then your municipality and your school district take about 1% more, and if you work in Philadelphia the city takes 3.735% — larger than the state tax itself.
That second half is the part almost no calculator shows you, and in Philadelphia it more than doubles your income tax burden.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Pennsylvania's rate and its local tax structure come from this site's own sourced 50-state dataset. Every dollar figure is computed by the same engine the site's calculators use, on a single filer taking the federal standard deduction with no pre-tax deferrals unless stated. Local Earned Income Tax and the Philadelphia Wage Tax are named here but never included in any total, because rates are set municipality by municipality — see section 4.
1. The flat rate, and what "flat" really means here
Pennsylvania's personal income tax is 3.07%, applied to essentially all compensation.
What makes it unusual is not the flatness — twelve states charge a single rate. It is that Pennsylvania pairs the flat rate with no standard deduction and no personal exemption. Most flat-tax states allow something: Illinois has a personal exemption, Colorado follows the federal deduction, Michigan gives $5,900 per exemption. Pennsylvania subtracts nothing.
The consequence is that Pennsylvania's tax is a genuine percentage of your gross compensation rather than of some reduced figure:
| Salary | Pennsylvania tax | Effective state rate | Take-home |
|---|---|---|---|
| $45,000 | $1,382 | 3.07% | $36,956 |
| $60,000 | $1,842 | 3.07% | $48,548 |
| $85,000 | $2,610 | 3.07% | $66,018 |
| $120,000 | $3,684 | 3.07% | $89,566 |
| $175,000 | $5,373 | 3.07% | $125,506 |
The effective rate column is identical at every income. That is the only state in the country where you can say that.
What it means practically
There is no bracket confusion in Pennsylvania. The marginal-versus-effective distinction that causes most tax misunderstanding does not arise, because both numbers are 3.07% at every income. A raise is taxed at exactly the rate your first dollar was.
Married couples pay exactly what single filers pay. With no brackets to widen and no deduction to double, filing status does not change the state calculation at all. A couple with $85,000 of combined income owes the same $2,610 a single filer owes.
Low earners get no shelter. This is the other side of having no deduction. A Pennsylvanian earning $20,000 pays 3.07% on all of it, while an Ohioan earning $20,000 pays nothing at all — Ohio's first $26,050 is taxed at zero. Pennsylvania's flat structure is straightforward and it is not progressive.
Run your own salary against Pennsylvania's flat rate2. Where Pennsylvania sits nationally
At $85,000, the $2,610 places Pennsylvania eighth-lowest of the 41 states that levy an income tax:
| State | Tax on $85,000 |
|---|---|
| The nine no-income-tax states | $0 |
| North Dakota | $377 |
| Ohio | $1,621 |
| Arizona | $1,731 |
| Louisiana | $2,164 |
| Indiana | $2,478 |
| Rhode Island | $2,571 |
| Iowa | $2,578 |
| Pennsylvania | $2,610 |
| Mississippi | $2,668 |
| New Jersey | $3,225 |
| New York | $3,993 |
| Oregon | $6,864 |
Against neighbours: a Pennsylvanian on $85,000 pays $615 less than they would in New Jersey, $1,383 less than in New York, and $989 more than in Ohio.
Every one of those comparisons is incomplete, because Pennsylvania, Ohio, New York, Maryland and Delaware all permit local income taxes. Comparing state rates alone compares the smaller half of the burden in each.
3. The full picture on $85,000
| Amount | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| Pennsylvania income tax (3.07%) | −$2,610 |
| Take-home | $66,018 |
| Local EIT, not included | typically ~$850 |
| …or Philadelphia Wage Tax | ~$3,175 |
The federal share is $16,373 — more than six times what Pennsylvania took. Even in a state with a very visible flat rate, federal dominates.
But look at the two italic lines. Outside Philadelphia the local tax adds roughly a third again to the state figure. Inside Philadelphia it adds more than the state tax itself.
4. The local tax that is a third again on top
Pennsylvania's local Earned Income Tax is not a rounding error, and outside Philadelphia it is nearly universal.
Nearly every Pennsylvania municipality and school district levies an EIT under Act 32, collected by county-level tax collection districts. Your rate is the sum of two components: the municipality's share and the school district's share.
The commonly cited 1% is the ordinary floor rather than a statewide figure — in some places the combined rate is substantially more. On a 3.07% state rate, a 1% local rate is a third again on top, taking a Pennsylvanian's real income tax burden to roughly 4.07%.
How Act 32 changed the mechanics
Before Act 32, employers dealt with hundreds of individual collectors. The Act consolidated collection into county-level tax collection districts, which is why Pennsylvania employers now withhold local EIT based on a comparison between your resident rate and your work location rate, remitting to the appropriate collector.
Two practical consequences:
Your rate is the sum of two entities' decisions, and they change independently. A school district referendum can move your local rate without your municipality doing anything.
Both your home and work addresses matter. The withholding comparison means moving jobs across a municipal line can change what is withheld, even if you have not moved house.
5. Philadelphia is a completely different system
This is the single most important thing for anyone working in or moving to Philadelphia, and it is routinely missed.
Philadelphia sits outside the Act 32 system entirely. It does not levy an Earned Income Tax. It levies the Wage Tax, at 3.735% on residents.
Set that beside the state rate:
| Rate | |
|---|---|
| Pennsylvania state income tax | 3.07% |
| Philadelphia Wage Tax (resident) | 3.735% |
| Combined | ~6.8% |
The city charges more than the state does. A Philadelphia resident's real income tax burden is roughly 6.8%, which moves Pennsylvania from eighth-cheapest of the income-tax states to something closer to mid-table — on the same salary, in the same state, purely by address.
On $85,000, the Wage Tax is roughly $3,175 on top of the state's $2,610. A calculator showing only the state figure has told a Philadelphia worker about less than half of their income tax.
Nonresidents working in Philadelphia
The Wage Tax applies to nonresidents working in the city as well, at a lower rate than the resident one. This catches commuters from surrounding counties who reasonably assume their suburban EIT is the whole local story.
If you live in a suburb and work in Philadelphia, you need to understand both your home EIT and the nonresident Wage Tax, and how they interact — this is one of the few paycheck questions in the country where getting local advice is genuinely worth the cost.
6. Why the calculators leave the local layer out
There is no such thing as "the Pennsylvania local rate." There are hundreds of combinations, each the sum of a municipal share and a school district share, set independently, plus Philadelphia operating on a different tax entirely.
A take-home figure that silently included 1% would be wrong for Philadelphia by a factor of nearly four. One that included Philadelphia's 3.735% would be wildly wrong for everyone else. Naming both and leaving them out of the total is the only defensible option.
So add your own rate to every Pennsylvania figure you see, including ours. Your local EIT rate is published by your county's tax collection district and appears on your pay stub; if you work in Philadelphia the Wage Tax line will be there instead.
7. What Pennsylvania does not tax
Pennsylvania's flat rate is broad, but its treatment of retirement income is unusually generous and worth knowing.
Pennsylvania does not tax Social Security benefits. It also does not tax distributions from qualified retirement plans for taxpayers who have reached retirement age — 401(k), 403(b) and IRA withdrawals in retirement are generally not subject to Pennsylvania personal income tax.
That is a materially better deal than most states offer. Ohio, for instance, exempts Social Security but taxes 401(k) distributions in full as ordinary income. Pennsylvania exempts both.
The implication: Pennsylvania is a mid-range state for a worker and an unusually cheap one for a retiree. A retiree drawing on Social Security and a 401(k) may owe essentially no Pennsylvania income tax at all, while paying the full 3.07% on the same income during their working life.
Note that the local EIT applies to earned income, so it generally does not reach retirement distributions either — which reinforces the same point.
8. Reducing what Pennsylvania takes
The levers here are narrower than in most states, because of how Pennsylvania defines its base.
Pre-tax deferrals often do NOT reduce Pennsylvania tax. This is the important one and it surprises people who move to Pennsylvania. Pennsylvania does not start from federal adjusted gross income the way most states do — it has its own definition of taxable compensation, and elective deferrals to a 401(k) are generally still subject to Pennsylvania income tax in the year contributed.
So the same $10,000 deferral that saves a Californian $930 in state tax may save a Pennsylvanian nothing at all. The federal saving is unaffected and remains the main event; the state saving that exists elsewhere does not appear here.
This is also why Pennsylvania does not tax the distribution later — the money was already taxed going in. It is a genuine trade rather than a penalty, and it changes the traditional-versus-Roth calculation for Pennsylvania residents in a way generic advice does not capture.
Confirm your own situation rather than relying on this summary: employer plan types differ and the rules around them are more intricate than a paragraph can hold.
9. Two Pennsylvanians, same salary
The address effect is large enough to be worth showing directly. Two people earning $85,000:
| Suburban township | Philadelphia resident | |
|---|---|---|
| Pennsylvania income tax | $2,610 | $2,610 |
| Local tax | ~$850 (1% EIT) | ~$3,175 (3.735% Wage Tax) |
| Combined state and local | ~$3,460 | ~$5,785 |
| Effective combined rate | ~4.07% | ~6.8% |
A $2,325 a year difference on identical salaries in the same state, driven entirely by which side of a city boundary someone lives on.
For anyone weighing a move within Pennsylvania — or a job that would put them inside the city — that figure belongs in the decision alongside rent and commute. It is roughly $194 a month.
10. Moving to or from Pennsylvania
The state rate flatters Pennsylvania; the combined rate does not. 3.07% looks excellent against New Jersey or New York. Once local tax is added, a suburban Pennsylvanian is around 4.07% and a Philadelphian around 6.8% — which is no longer a clear win against New Jersey and is worse than Ohio's typical combined figure.
Retirees should look again. Pennsylvania's exemption of both Social Security and qualified retirement distributions makes it genuinely competitive for retirement, which is the opposite of its position for workers. If your horizon includes retiring in place, that changes the calculation substantially.
Reciprocity exists with several neighbours. Pennsylvania has reciprocal agreements with a number of bordering states covering state income tax for commuters, which means you generally pay only your home state's tax on wages. These agreements do not cover local taxes, so a reciprocal agreement does not exempt you from the Philadelphia Wage Tax or a local EIT.
Property tax is a separate and significant question, and it varies enormously by school district within Pennsylvania — often more than the income tax does.
11. What a flat rate with no deduction does at the bottom
Worth dwelling on, because it is where Pennsylvania's structure differs most sharply from its neighbours and it affects the people least able to absorb it.
Most states shelter a first slice of income. Ohio taxes the first $26,050 at zero. Idaho and Iowa both allow a $16,100 standard deduction matching the federal one. California's first bracket is 1%. Pennsylvania shelters nothing at all.
At $20,000 of income:
| State | Headline rate | State income tax on $20,000 |
|---|---|---|
| Ohio | 2.75% | $0 — first $26,050 taxed at 0% |
| California | up to 12.3% | $22 — after a $153 exemption credit |
| Idaho | 5.3% | $74 — $16,100 deduction |
| Iowa | 3.8% | $108 — $16,100 deduction |
| Pennsylvania | 3.07% | $614 — nothing subtracted |
Pennsylvania's 3.07% is among the lowest headline rates in the country and produces by far the largest bill of the five, because everyone else subtracts something first. California, whose top rate is four times Pennsylvania's, charges a twenty-eighth as much at this income.
The general lesson, which applies well beyond Pennsylvania: a headline rate tells you nothing without knowing what it applies to. A low rate on a broad base can exceed a high rate on a narrow one, and the difference falls hardest at the bottom of the income range where a deduction is proportionally largest.
Pennsylvania does operate a Tax Forgiveness programme that reduces or eliminates liability for lower-income filers, claimed on Schedule SP and based on eligibility income and family size. It is a genuine offset to the point above and it is separate from the rate structure — worth checking if your income is modest, because it is claimed rather than automatic.
12. Reciprocity, and the commuter question
Pennsylvania borders six states and a large number of people cross a line to work, so the reciprocity rules matter more here than in most places.
What reciprocity does. Pennsylvania maintains reciprocal agreements with several neighbouring states. Where one applies, you generally pay income tax to your state of residence only, rather than filing in both. Your employer withholds for your home state once you file the appropriate non-residency certificate with them.
What reciprocity does not do, and this is the trap: it does not touch local taxes. A reciprocal agreement covering state income tax leaves the Philadelphia Wage Tax and municipal EITs entirely intact. Someone living in New Jersey and working in Philadelphia may pay New Jersey state income tax under reciprocity and the Philadelphia nonresident Wage Tax as well.
The certificate is not automatic. If you never file it, your employer may withhold for the work state, and you will be reclaiming it on a nonresident return rather than simply not paying it. This is a common and entirely avoidable annual chore.
If you cross a state line to work, the two questions worth answering before your first paycheck are: does an agreement cover my pair of states, and what local tax applies regardless of it.
Frequently asked questions
What is Pennsylvania's income tax rate? A flat 3.07% on essentially all compensation, with no standard deduction and no personal exemption. On $85,000 the state takes exactly $2,610 — 3.07% of the whole salary.
How much is take-home pay on $85,000 in Pennsylvania? $66,018 for a single filer, after $9,870 federal income tax, $6,503 FICA and $2,610 Pennsylvania tax. Your local Earned Income Tax comes out of that figure and is not included — roughly $850 at a common 1% rate, or about $3,175 if you live in Philadelphia.
Do married couples pay less in Pennsylvania? No. With a flat rate, no deduction and no exemption, there is nothing that widens for joint filers. A couple with $85,000 of combined income owes the same $2,610 a single filer does.
What is the local Earned Income Tax? A tax levied by nearly every Pennsylvania municipality and school district outside Philadelphia under Act 32, collected by county-level districts. Your rate is the sum of the municipal and school district shares, commonly around 1% — a third again on top of the state's 3.07%.
How much is the Philadelphia Wage Tax? 3.735% on residents, which is more than the state income tax itself. Philadelphia sits outside the Act 32 system entirely and levies this instead of an EIT. Nonresidents working in the city pay it at a lower rate.
Does a 401(k) contribution reduce my Pennsylvania tax? Generally not. Pennsylvania does not start from federal AGI and taxes elective deferrals in the year contributed. The corollary is that it generally does not tax the distribution later, so it is a trade rather than a penalty — but it means the state saving other states offer does not appear here.
Does Pennsylvania tax retirement income? It does not tax Social Security, and it generally does not tax qualified retirement plan distributions for those who have reached retirement age. That makes Pennsylvania notably cheap for retirees and only mid-range for workers.
Is Pennsylvania a low-tax state? On the state income tax line, yes — eighth-lowest of the 41 states that levy one. Once local tax is included a suburban resident is near 4.07% and a Philadelphia resident near 6.8%, which is a very different position.
What to do next
Start with the state figure, then find your own local rate and add it — outside Philadelphia that is roughly a third again, and inside it more than doubles the total.
- Pennsylvania take-home pay calculator — every deduction separated, with the local tax named rather than guessed.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in Ohio — the neighbouring state with the same local-tax problem and a different shape.
- Pennsylvania mortgage payment calculator — where school district property tax shows up.
- 50/30/20 budget calculator — what to do with the take-home figure.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer taking the federal standard deduction with no pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Pennsylvania figures from this site's sourced 50-state dataset. Local Earned Income Tax and the Philadelphia Wage Tax are named but never included in any total, because rates are set municipality by municipality and Philadelphia operates outside the Act 32 system. Pennsylvania's treatment of retirement income and of elective deferrals is summarised rather than exhaustive. This is general education and not tax advice; for your own situation consult a licensed tax professional.