If you work in Pennsylvania and want to know how much tax is taken out of your paycheck in PA, plan on roughly 20% of gross pay disappearing to withholding before any health insurance or retirement contributions come out. The stack is always the same: federal income tax, Social Security and Medicare, Pennsylvania’s flat 3.07% state income tax, a local earned income tax tied to where you live or work, a small Local Services Tax, and a tiny unemployment compensation deduction. Live or work in Philadelphia and the total climbs closer to 24% because of the city wage tax.
What a Typical PA Paycheck Looks Like
Start with concrete numbers. A single worker earning $60,000 a year, paid every two weeks, has a gross check of $2,307.69. Assume they live and work outside Philadelphia, in a municipality with a 1% local earned income tax and a $52 annual Local Services Tax.
- Federal income tax: roughly $192 per check (varies with W-4 elections)
- Social Security at 6.2%: $143.08
- Medicare at 1.45%: $33.46
- PA state income tax at 3.07%: $70.85
- Local earned income tax at 1%: $23.08
- Local Services Tax: $2.00
- PA unemployment at 0.07%: $1.62
That’s about $466 withheld per paycheck, leaving roughly $1,842 in take-home from a $2,308 gross. A Philadelphia resident at the same salary would see about $86 more per check for the city wage tax.
Every line below federal income tax is a fixed percentage or flat dollar amount, so you can verify each one against your pay stub. If the PA state line isn’t exactly 3.07% of gross, or the local rate doesn’t match your municipality’s published rate, raise it with payroll before the errors compound.
Federal Income Tax
Federal income tax is almost always the biggest line and the hardest to predict, because your employer calculates it from the Form W-4 you submitted: filing status, number of jobs, dependents, and any extra withholding you asked for.1Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate Skip the W-4 and your employer withholds as if you were single with no adjustments, which typically pulls out more than necessary.2Internal Revenue Service. FAQs on the 2020 Form W-4
The system is progressive. For 2026, a single filer’s brackets are 10% up to $12,400; 12% from $12,401 to $50,400; 22% from $50,401 to $105,700; 24% from $105,701 to $201,775; 32% from $201,776 to $256,225; 35% from $256,226 to $640,600; and 37% above $640,600. Married couples filing jointly get roughly double those thresholds.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 These rates apply to taxable income after your standard deduction, not your raw gross pay, so your effective rate always runs lower than your top bracket.
Social Security and Medicare
FICA takes 6.2% of your gross wages for Social Security and 1.45% for Medicare, and the rates don’t flex with filing status or dependents.4Social Security Administration. What is FICA?
Social Security has a ceiling. In 2026, the 6.2% only applies to the first $184,500 of annual earnings; once you cross that, the deduction drops off your remaining checks for the year.5Social Security Administration. Contribution and Benefit Base Medicare has no cap.
High earners pay an additional 0.9% Medicare tax. Your employer starts withholding it once your individual wages pass $200,000 in a calendar year, but your actual liability depends on filing status: joint filers owe it on combined wages above $250,000, married-filing-separately at $125,000.6Internal Revenue Service. Topic No. 560, Additional Medicare Tax You may need to settle up at tax time.
Pennsylvania’s 3.07% State Income Tax
Pennsylvania keeps state income tax simple: a flat 3.07% on all taxable compensation, no brackets.7Department of Revenue | Commonwealth of Pennsylvania. Tax Rates The same rate hits bonuses, commissions, and incentive pay when they’re paid out. Nonresidents who work in Pennsylvania also owe 3.07% on compensation earned here, and their PA employer must withhold it.8Department of Revenue | Commonwealth of Pennsylvania. Nonresidents and Part-Year Residents
The 401(k) Catch
Pennsylvania doesn’t follow federal rules on retirement contributions. Your traditional 401(k), 403(b), or 457 contribution comes out pre-tax for federal purposes but is still fully taxable compensation for PA purposes.9Department of Revenue | Commonwealth of Pennsylvania. Gross Compensation Put $500 of each paycheck into your 401(k) and that $500 still gets hit with the 3.07%. Health Savings Account contributions are the exception: Pennsylvania follows federal rules there and allows the deduction, capped at the federal HSA limits.10Department of Revenue | Commonwealth of Pennsylvania. Deductions and Credits
When you estimate take-home pay, apply the 3.07% to your full gross before retirement contributions, not after.
Local Earned Income Tax
Almost every PA worker pays a local earned income tax on top of the state 3.07%. Rates vary by municipality and school district, generally running from about 0.5% to just over 1%, with the total typically split between the municipality and the school district. Act 32 made employers responsible for withholding and remitting it along with the Local Services Tax.11PA Business One-Stop Shop. Act 32 and Local Earned Income Tax
Which rate applies depends on both your home and work addresses. If your home municipality imposes a local earned income tax, that’s your rate. If it doesn’t but your workplace does, the workplace rate applies. A residency certification form tells your employer which rate to use and which local tax collector gets the money.
Philadelphia Wage Tax
Philadelphia runs its own wage tax that sits well above the typical local rate. For 2026, residents pay 3.74% on all wages; nonresidents who work in the city pay 3.43%.12City of Philadelphia. Wage Tax (Employers) Both rates are scheduled to keep ticking down over the next several years. For a Philadelphia resident earning $70,000, the wage tax alone pulls about $2,618 a year, on top of the state 3.07%.
Nonresidents who were required by their employer to work remotely from outside the city during a given period can petition for a refund of the wage tax withheld for that time. You need a copy of your W-2 and a letter on company letterhead confirming the remote work was required, not optional.13City of Philadelphia Department of Revenue. Philadelphia Wage Tax Policy Guidance for Non-Resident Employees You file after year end and processing runs about six to eight weeks.
Local Services Tax
Most PA workers also see a small flat-dollar line for the Local Services Tax. The combined municipal and school district amount is capped at $52 per year, and no individual owes more than $52 total in a calendar year across all jurisdictions.14PA Department of Community & Economic Development. Local Services Tax (LST) Employers prorate it: about $1 a week on a weekly schedule, roughly $2 per biweekly check.
If your total earned income from all sources within the taxing jurisdiction stays under $12,000 for the year, you may qualify for an exemption. Where the LST rate exceeds $10, the low-income exemption is mandatory; where it’s $10 or less, offering it is optional.14PA Department of Community & Economic Development. Local Services Tax (LST) File an exemption certificate with your employer to stop the withholding.
Pennsylvania Unemployment Withholding
Pennsylvania is one of the few states that pulls unemployment insurance from employees as well as employers. For 2026, the employee rate is 0.07% of gross wages.15Pennsylvania Office of the Budget. BCPO Payroll Memo 26-01 Federal Withholding Tax and State Unemployment Tax 2026 On a $50,000 salary that’s $35 for the whole year, almost invisible per paycheck but visible as a separate line. The rate can shift annually with the Unemployment Compensation Fund’s health, though it has held at 0.07% for several years.
If You Live or Work Across a State Line
Pennsylvania has reciprocity agreements with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia.16Department of Revenue | Commonwealth of Pennsylvania. Determining Residency You owe income tax only to the state you live in, not the state you work in. A PA resident commuting to New Jersey, for example, has 3.07% withheld rather than New Jersey’s graduated rates. File an exemption certificate with the out-of-state employer; without it, both states can end up withholding and you’ll have to sort it out at filing time. Reciprocity covers wages and salary only, not business or rental income.