If you work in Pennsylvania, expect roughly 24 to 30 percent of your gross pay to be withheld for taxes, and sometimes more. That total stacks federal income tax, Social Security and Medicare, Pennsylvania’s flat 3.07 percent state income tax, a local earned income tax that runs from about 0.5 percent to 3.74 percent, a small unemployment contribution, and a modest local services fee. Where you land in that range depends mostly on your income, your filing status, and which municipality you live and work in.
The Pennsylvania-Specific Layer
Four deductions on your pay stub are specific to Pennsylvania, and together they are the most predictable part of your withholding because the rates do not change with income.
State Income Tax: 3.07 Percent, Flat
Pennsylvania taxes taxable compensation at a flat 3.07 percent for residents and for nonresidents who work in the state.1Commonwealth of Pennsylvania. Nonresident Withholding – Department of Revenue Someone making $30,000 pays the same rate as someone making $300,000. Multiply your gross pay by 0.0307 and you have the number your employer sends to the Department of Revenue.
One quirk to know: Pennsylvania does not let you subtract traditional 401(k) contributions from taxable wages the way the federal rules do. Those contributions are still taxed as compensation in the year you make them.2Commonwealth of Pennsylvania. Gross Compensation – PA Personal Income Tax Guide The trade-off comes later, since Pennsylvania generally does not tax qualifying retirement withdrawals.
Local Earned Income Tax
Pennsylvania municipalities and school districts collect their own earned income tax on top of the state rate. Many areas land near a combined 1 percent, split between the municipality and the school district, but rates across the state run from about 0.5 percent up to 3.74 percent in Philadelphia.3City of Philadelphia. Earnings Tax (Employees)
Under Act 32, your employer compares your resident municipality’s EIT rate with the nonresident rate where you work and withholds at whichever is higher.4PA Department of Community & Economic Development. FAQ – Act 32, Earned Income Tax Collection Reform A Residency Certification Form, which carries the six-digit Political Subdivision (PSD) code for your home address, tells your employer which rate to apply.5PA Department of Community & Economic Development. PSD Codes and EIT Rates Update it when you move, or your tax payments can end up with the wrong jurisdiction.
Local Services Tax
If your work municipality levies a Local Services Tax, you will see a small line item for it. The combined municipal and school-district rate is capped at $52 per year, and some jurisdictions set it lower.6Pennsylvania General Assembly. Local Services Tax Unless the rate is $10 or less, the amount is prorated across your pay periods, so a $52 annual tax comes out as about $1 per week or $2 per biweekly check.7PA Department of Community and Economic Development. Local Services Tax
If the LST where you work is more than $10 per year, you are exempt when your total earned income from all sources in that jurisdiction is less than $12,000. You claim it by filing an exemption certificate with your employer each year, and if the tax was already withheld you can apply for a refund through the local tax collector.6Pennsylvania General Assembly. Local Services Tax
Unemployment Compensation
Pennsylvania is one of the few states that pulls a small unemployment contribution from employees. For 2026, the rate is 0.07 percent of total gross wages, which works out to about 70 cents per $1,000 earned, with no wage cap.8Department of Labor and Industry. Yearly Tax Highlights The Department of Labor and Industry can adjust the rate each year based on the Unemployment Compensation Trust Fund.
Federal Income Tax and FICA
The federal piece is the largest and the most variable. Federal income tax uses progressive brackets that run from 10 percent to 37 percent, so your effective federal rate depends on your income, filing status, and the deductions and credits reflected on your W-4. For 2026 the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, which reduces the income actually subject to those brackets.9Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A middle-income single filer typically sees an effective federal rate in the low double digits, well below the top marginal rate in their bracket.
FICA is fixed. Social Security is withheld at 6.2 percent of gross wages up to $184,500 in 2026, after which the withholding stops for the rest of the year.10Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Medicare is withheld at 1.45 percent of all wages with no cap, and an additional 0.9 percent is withheld on wages above $200,000, bringing the Medicare rate on those higher earnings to 2.35 percent.11Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Combined, Social Security and Medicare take 7.65 percent of most workers’ gross pay.
What the Combined Percentage Looks Like
Take a worker earning $60,000 a year in a typical Pennsylvania municipality with a 1 percent local EIT. The fixed-rate pieces alone add up to about 11.79 percent:
- Social Security: 6.2%
- Medicare: 1.45%
- Pennsylvania state income tax: 3.07%
- Local earned income tax: 1%
- Unemployment: 0.07%
The Local Services Tax adds up to $52 a year on top. Layer on a federal effective rate in the neighborhood of 10 to 14 percent for that income level, and total withholding lands in the 22 to 26 percent range. Higher earners push toward 30 percent or more as the federal rate climbs.
Situations That Change Your Number
A few circumstances move the total noticeably in one direction or the other.
Philadelphia. The city’s wage tax is the highest local rate in the state. As of July 1, 2025, residents pay 3.74 percent and nonresidents who work in the city pay 3.43 percent.3City of Philadelphia. Earnings Tax (Employees) A Philadelphia resident making $60,000 sees roughly three extra percentage points of withholding compared with someone in a 1 percent township.
Border-state reciprocity. If you live in Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia and work in Pennsylvania, a reciprocal agreement lets your Pennsylvania employer withhold your home state’s income tax instead of the 3.07 percent Pennsylvania rate. File Form REV-419 with your employer to stop Pennsylvania withholding; the agreement covers W-2 wages only, and you need to resubmit the form annually or whenever your situation changes.2Commonwealth of Pennsylvania. Gross Compensation – PA Personal Income Tax Guide The same logic runs in reverse for a Pennsylvania resident working across the border.
Low-income LST exemption. Earning less than $12,000 from all sources in a work jurisdiction that charges more than $10 in LST removes that line item entirely, once you file the exemption certificate.6Pennsylvania General Assembly. Local Services Tax
Retirement contributions. At the federal level, traditional 401(k) contributions lower the wages subject to federal income tax, which can shave your federal withholding. Pennsylvania still taxes those same contributions as current compensation, so they do not reduce the 3.07 percent state line or your local EIT.2Commonwealth of Pennsylvania. Gross Compensation – PA Personal Income Tax Guide The federal and state taxable-wage figures on your pay stub will not match, and that is why.