Georgetown local tax guide
Who pays Georgetown's local tax
Georgetown's tax is set by job location. Many workers drive up Interstate 75 from Lexington, or in from Paris, Cynthiana, and Frankfort, to work in Georgetown, and they pay the 2% city rate just as residents do. A Georgetown resident who commutes to a Lexington job pays Lexington's 2.25% nonresident fee instead and nothing to Georgetown on those wages. Working from a home office inside Georgetown city limits counts as work done in the city.
City and county taxes in Scott County
Georgetown levies a flat 2% on gross wages and net profits earned in the city, listed in the Kentucky Secretary of State's local tax records. The tax has no exemption, so a $40,000 worker pays $800 and a $100,000 worker $2,000.
Scott County officials describe their system as stacked: the county levies its own occupational tax in addition to the city's, and that money helps fund city, county, and school operations. A job inside Georgetown therefore carries two local deductions, while a job in rural Scott County carries only the county one.
Toyota Motor Manufacturing Kentucky and its suppliers employ thousands of people in and around town, and the city's budget leans heavily on the occupational tax those jobs generate.
Worked example: $75,000 on a Georgetown payroll
A single worker earning $75,000 owes the IRS $7,670 for the year and pays $4,650 of Social Security and $1,088 of Medicare. Kentucky's flat 3.5% applies after a $3,360 standard deduction, for $2,507 of state tax on $71,640.
The 2% city tax adds $1,500, so take-home pay comes to $57,585, or $4,799 a month. A Kentucky worker with no local tax would keep $59,085, so Georgetown's tax is worth about $58 per biweekly check. The Scott County tax is not in these figures.
Production workers who earn substantial overtime pay the same 2% on every overtime dollar, since the city taxes gross compensation. See the Kentucky $75,000 salary breakdown for state-level detail.
The Lexington-Georgetown commute
Georgetown and Lexington are about 15 miles apart, and a lot of workers cross the county line each day. A Lexington resident working in Georgetown pays Georgetown's 2% and Scott County's tax, and none of Lexington's 2.75% resident rate on those wages, because Lexington taxes only work done in Fayette County.
Flip the commute and the math changes: a Georgetown resident working in Lexington pays the 2.25% urban county fee as a nonresident. At $75,000 that resident rate in Lexington is $2,063, $563 more than Georgetown's city tax. Compare the two on the Lexington calculator.
State withholding is separate and set on Form K-4. Your employer handles city and county withholding based on where you report to work.
Georgetown's rate statewide
Georgetown's 2% matches Bowling Green, Florence, Paducah, Richmond, Hopkinsville, and Danville. At $75,000 it costs $150 less than a Louisville resident pays and $375 less than Ashland's 2.5%, but $262 more than Henderson's 1.65%.
Tips for Georgetown paychecks
Plan for two local deductions
Scott County stacks its occupational tax on the city's. When comparing a Georgetown job with one in a county without a payroll tax, count both.
Overtime raises the local bill too
City tax applies to all gross pay, including overtime and bonuses. A big overtime year at a plant inside the city raises your Georgetown tax in step.
Lexington residents keep more by working here
Moving your job from Lexington to Georgetown, while living in Fayette County, removes Lexington's resident occupational tax from those wages. Scott County's tax replaces part of the savings.