Pennsylvania tax guide
Pennsylvania employs a straightforward flat tax system set at 3.07%. While this rate is uniform across the state, the complexity of local taxation—where cities like Philadelphia and Reading charge their own additional income taxes—means that an employee's take-home pay can vary significantly based on their specific municipality.
Key tax highlights
Payroll
- Pennsylvania uses a flat state income tax rate on taxable wages.
- Cross-border workers should also check reciprocity rules.
Local taxes
- Philadelphia wage tax is one of the biggest local paycheck adjustments in the country.
Deductions
- Pennsylvania does not follow a federal-style standard deduction model for wage tax calculations.
Salary examples
Pre-computed take-home estimates at common salary levels. For example, a $75,000 salary in Pennsylvania yields about $59,290 after all deductions (79.0% take-home rate). Use the calculator above with your actual salary to see your specific estimate.
| Salary | Federal | State | FICA | Take-Home | Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $1,535 | $3,825 | $40,820 | 81.6% |
| $75,000 | $7,670 | $2,303 | $5,738 | $59,290 | 79.0% |
| $100,000 | $13,170 | $3,070 | $7,650 | $76,110 | 76.1% |
| $150,000 | $24,734 | $4,605 | $11,475 | $109,186 | 72.8% |
Neighboring states
How Pennsylvania compares with border states on income tax. At a $75,000 salary, a Pennsylvania worker pays $2,303 in state tax annually.
| State | Tax type | Top rate |
|---|---|---|
| Delaware | progressive | 6.60% |
| Maryland | progressive | 6.50% |
| West Virginia | progressive | 4.82% |
| Ohio | progressive | 2.75% |
| New York | high tax | 10.90% |
| New Jersey | high tax | 10.75% |
Cost of living context
The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD area has a Regional Price Parity of 101.2, which is 1.2% above the national average. Your dollar goes slightly less far here.
HUD Fair Market Rent estimates: Studio $1,328/mo, 1-BR $1,491/mo, 2-BR $1,835/mo.
Cities with local taxes
These Pennsylvania city pages factor local taxes into the take-home estimate. A city like Philadelphia adds an extra local deduction on top of statewide withholding.
| City | Local rate |
|---|---|
| Philadelphia | 3.74% |
| Pittsburgh | 1% |
| Allentown | 1.975% |
| Erie | 1.65% |
| Reading | 3.6% |
| Scranton | 3.4% |
Tax tips for Pennsylvania
- Check with your HR department to ensure they are withholding the correct local earned income tax for your specific school district.
- If you live in a reciprocal state, confirm your employer has the proper exemption forms on file to avoid unnecessary state tax withholding.
- Review the Pennsylvania Tax Forgiveness schedule if your income falls below certain thresholds to see if you qualify for a reduction in your state tax burden.
- Keep records of your local tax payments, as these are often collected by third-party regional collectors rather than the state directly.
Did you know?
- •Pennsylvania is one of the few states that maintains a strictly flat income tax rate of 3.07%.
- •The state’s tax reciprocity agreements are designed to help commuters who cross state lines for work avoid the headache of filing multiple state returns.
Filing guidance
When filing in Pennsylvania, you must submit a PA-40 form to the Department of Revenue. Because the state does not mirror many federal deductions, it is crucial to carefully review the PA-40 instructions for specific line-item differences. Additionally, residents of cities like Pittsburgh or Philadelphia must often file separate local tax returns with local collectors to reconcile their withheld local income taxes.
Relocation context
Pennsylvania is simple at the state level, but city payroll taxes can make two nearby job offers look very different.