Colorado Springs has no local income tax. The city does not levy a wage tax, an earnings tax, or an occupational privilege tax, so nothing is withheld from your paycheck at the city level. The only income tax that comes out of your wages here is Colorado’s state income tax, plus the usual federal withholding.
Colorado Springs is a home rule city under Article XX of the Colorado Constitution, which gives it broad authority over local taxation.1Code Library. City Code of Colorado Springs, Colorado – 12.1.102 Legislative Findings That authority is limited by Colorado’s Taxpayer’s Bill of Rights (TABOR), which requires voter approval before any government can create a new tax or raise a rate. Colorado Springs voters have never approved a local income tax, and no such measure has appeared on a city ballot.
No Occupational Privilege Tax Either
People asking about a Colorado Springs wage tax often have Denver’s Occupational Privilege Tax in mind. Denver charges every employee who earns at least $500 in a given month a flat $5.75 per month, with employers owing an additional $4.00 per month per taxable employee.2City and County of Denver. Business Tax FAQs Aurora repealed its own occupational privilege tax effective January 1, 2025.
Colorado Springs has never adopted anything like it. For employees, that means roughly $69 more per year staying in your pocket compared with working in Denver. For employers, payroll is simpler because there is no per-head monthly remittance to the city.
One thing to check if you commute: the occupational privilege tax obligation follows where you work, not where you live. Living in Colorado Springs does not exempt you from a tax owed in the city where your job is located.
What Does Come Out of Your Colorado Springs Paycheck
The absence of a city tax does not mean no income tax at all. Colorado taxes your earnings at a flat 4.40% of federal taxable income for tax years beginning on or after January 1, 2022, and before January 1, 2027.3Colorado General Assembly. Initiative 2025-2026 No 21 Income Tax Rate Your employer withholds this amount and sends it to the Colorado Department of Revenue.4Cornell Law Institute. Colorado Code 39-22-604 – Colorado Income Tax Withholding
You file your annual Colorado return on Form DR 0104 by April 15. Colorado grants an automatic six-month extension to October 15 without a separate form, but the extension only covers filing. You still owe at least 90% of your tax liability by April 15 to avoid penalties and interest.5Department of Revenue – Taxation. Individual Income Tax Due Dates and Filing Extension
The FAMLI Premium Is Not a City Tax
One line item on Colorado Springs pay stubs that gets mistaken for a local tax is the Family and Medical Leave Insurance (FAMLI) premium. This is a state program. For 2026, the total premium rate is 0.88% of wages, typically split evenly between employer and employee at businesses with ten or more workers. Smaller employers may pass the full premium to employees. None of it goes to the city.
How Colorado Springs Funds Itself Instead
Because there is no local income tax, the city raises revenue through sales tax, property tax, and service fees. Colorado Springs collects its own sales tax at 3.07%, which combines with state, county, and transit rates for a total of 8.20% on most purchases.6City of Colorado Springs. General Sales Tax Information A use tax component applies when you buy something outside the city and bring it in without having paid local sales tax, which commonly comes up with online orders.
Property tax is administered at the county level by the El Paso County Assessor. Your bill is calculated by applying the residential assessment rate, 6.8% for 2026 after a 10% reduction on the first $700,000 of actual value, to your home’s market value, then multiplying by the combined mill levy for your location.7Colorado Division of Property Taxation. Residential Local Government Assessment Rate Mill levies vary across the city depending on which school, fire, and metropolitan districts cover a given address, so two homes with identical market values can end up with different tax bills.
None of this changes the answer to the paycheck question. Working or living in Colorado Springs does not add a city income tax or wage tax to your withholding.