Pennsylvania paycheck guide
How Pennsylvania's flat tax works
Pennsylvania's personal income tax is a single 3.07% rate applied to gross compensation. There is no standard deduction, no personal exemption, and no bracket below 3.07%, so the effective rate is 3.07% at $30,000 and at $250,000 alike. That makes the math simple: multiply your taxable wages by 0.0307.
The state does not start from federal adjusted gross income. It has its own definition of compensation, and that definition includes employee deferrals to a 401(k), 403(b), or 457 plan. Contributions that cut your federal taxable wages still count as Pennsylvania wages, so box 16 of your W-2 is often higher than box 1.
The flip side comes in retirement. Because contributions were already taxed, Pennsylvania generally does not tax distributions from employer retirement plans once you retire, and it does not tax Social Security benefits. Lower-income households can also get some or all of their tax back through Pennsylvania's Tax Forgiveness program on Schedule SP.
Worked example: $75,000 in Pennsylvania
For a single filer earning $75,000, Pennsylvania taxable income is the full $75,000. At 3.07%, state tax is $2,303. There are no deductions to subtract and no brackets to step through.
The federal return is where deductions finally appear. Pennsylvania's flat tax ignores the $16,100 federal standard deduction, but the IRS uses it, taxing the remaining $58,900 at 10% on $12,400, 12% on $38,000, and 22% on $8,500 for $7,670. With $4,650 of Social Security and $1,088 of Medicare, a Pennsylvania worker clears $59,290 before any local earned income tax, roughly $4,941 a month. The Pennsylvania $75,000 salary page splits this by pay period.
If the same worker sends part of each paycheck to a traditional 401(k), federal tax falls but the Pennsylvania bill stays at $2,303, because the deferral is still taxable compensation in Pennsylvania.
Local earned income taxes, from Philadelphia to Erie
Pennsylvania's local taxes often cost more than the state's. Philadelphia's wage tax is 3.735% for residents and 3.425% for nonresidents who work in the city, so a resident earning $75,000 pays $2,801, more than the $2,303 state tax. The Philadelphia calculator shows the combined paycheck.
Outside Philadelphia, municipalities and school districts levy an earned income tax under Act 32, collected by county tax collection districts. Resident rates in our city pages include 3.75% in Chester ($2,813 at $75,000), 3.6% in Reading ($2,700), 3.4% in Scranton ($2,550), and 3% in Pittsburgh and Wilkes-Barre ($2,250). Smaller rates apply in Harrisburg at 2% ($1,500), Erie at 1.65% ($1,238), Lancaster at 1.6% ($1,200), York at 1.25% ($938), and Bethlehem at 1% ($750). See the Pittsburgh calculator for the resident and commuter split.
Employers withhold the higher of your home municipality's resident rate and the work location's nonresident rate, so give your employer the Residency Certification Form when you start a job or move. Like the state tax, local earned income tax is figured on wages that include 401(k) deferrals.
Two smaller items are excluded from our estimate: the flat annual Local Services Tax that many municipalities charge people who work there, and the small employee unemployment compensation contribution Pennsylvania withholds from wages, one of only a few states to do so.
Withholding, reciprocity, and remote work
Pennsylvania has no allowance-based state W-4. Employers simply withhold 3.07% of compensation, so the main way to change state withholding is to request an extra flat amount. If you qualify for Tax Forgiveness and expect to owe nothing, Form REV-419 lets you ask your employer to stop withholding.
Pennsylvania has reciprocity with New Jersey, Ohio, Indiana, Maryland, Virginia, and West Virginia. Residents of those states who work in Pennsylvania file Form REV-420 with their employer and pay state tax only at home. The agreements do not cover local tax, so a New Jersey resident who commutes into Philadelphia still pays the 3.425% nonresident wage tax.
Remote work matters for Philadelphia. Nonresidents owe the city wage tax only for days worked inside Philadelphia, so commuters on a hybrid schedule can request a refund of tax withheld for days worked at home outside the city. Philadelphia residents owe the resident rate wherever they work.
How Pennsylvania compares with its neighbors
At $75,000, Pennsylvania ranks 19th of 51 for take-home pay before local tax, and 15th at $150,000, because the flat rate never climbs. Most neighbors take more: a single filer keeps $244 less in West Virginia, $296 less in New Jersey, $895 less in Maryland, $1,151 less in New York, and $1,307 less in Delaware. Ohio is the exception, leaving $1,014 more.
Local tax can flip those rankings. A Philadelphia resident's $2,801 wage tax more than erases the state-level edge over New Jersey or New York. Against a state with no income tax, Pennsylvania costs a $75,000 earner $2,302 at the state level alone. Compare Pennsylvania vs New Jersey for the most common cross-river decision.
What to expect at your income
Earning under $50,000
With no standard deduction, Pennsylvania taxes the first dollar of pay. A single filer earning $30,000 owes $921 to the state and takes home $25,364 before local tax; at $50,000 the state takes $1,535, leaving $40,820 a year. Low earners should check the Tax Forgiveness program on Schedule SP, which can refund some or all of the state tax depending on household income and dependents. Local earned income tax still applies.
Earning $50,000 to $150,000
In this range Pennsylvania tax is exactly 3.07% of wages: $3,070 at $100,000, leaving $76,110, or $6,342 a month, before local tax. Traditional 401(k) deferrals cut federal tax at 22% but do not reduce Pennsylvania or local earned income tax, so a Roth 401(k) can make more sense here than in most states. Add your municipality's earned income tax, which ranges from 1% in Bethlehem to 3.735% for Philadelphia residents.
Earning over $150,000
Above $150,000, Pennsylvania's flat 3.07% rate is one of the lowest top rates in the region. A single filer earning $150,000 pays $4,605 to the state and keeps $109,186; at $250,000 the state bill is $7,675 and take-home is $175,507 before local tax. High earners living in Philadelphia, Reading, or Scranton pay more to the city than the state, so the choice of municipality is a bigger lever than state tax planning.
Pennsylvania paycheck tips
Hand in the Residency Certification Form
This form tells your employer which local earned income tax to withhold. Without it, you can end up under-withheld for your home municipality and owe at filing.
Reciprocity commuters: file REV-420
Residents of New Jersey, Ohio, Indiana, Maryland, Virginia, and West Virginia who work in Pennsylvania should file REV-420 so the 3.07% state tax is not withheld.
Log days worked outside Philadelphia
If you live outside the city and work a hybrid schedule, a record of home days supports a refund petition for wage tax withheld on those days.
Weigh Roth over traditional deferrals
Pennsylvania taxes 401(k) deferrals now but generally not retirement distributions later, so the state tax treatment of a Roth and a traditional account is nearly the same.
Check Tax Forgiveness before filing
Schedule SP can wipe out Pennsylvania tax for low-income households, and it can apply even when state tax was withheld all year.
Common mistakes
Using federal wages on the Pennsylvania return
Box 1 of your W-2 excludes 401(k) deferrals; Pennsylvania compensation does not. Use the state wages box, which is usually higher.
Assuming reciprocity covers local tax
Reciprocity stops state withholding only. A New Jersey or Maryland commuter working in Philadelphia still pays the nonresident wage tax.
Budgeting only for the 3.07% state rate
A $75,000 earner pays $2,303 to Pennsylvania but $2,801 more as a Philadelphia resident or $2,250 in Pittsburgh. Look up your municipality's rate before comparing offers.
Moving to or from Pennsylvania
Moving to Pennsylvania
Moving to Pennsylvania from New York, New Jersey, Maryland, or Delaware usually lowers state income tax, since the flat 3.07% applies at every income. The catch is local: choose between Philadelphia's 3.735% resident wage tax and a suburb with a far lower earned income tax, and expect 401(k) deferrals to stay taxable. Retirees benefit most, because Pennsylvania generally does not tax retirement plan distributions or Social Security.
Leaving Pennsylvania
Leaving Pennsylvania for Ohio raises take-home by $1,014 at $75,000 before local tax, while New York, Maryland, or Delaware cost more. Moving to a no-income-tax state saves $2,302 plus your local earned income tax. File a part-year PA-40 for the move year and a final local earned income tax return with your old tax collector.