Pennsylvania Paycheck Calculator (2026 Take-Home Pay)

Under Section 302 of the Tax Reform Code of 1971 (72 P.S. § 7302), Pennsylvania levies a uniform flat individual income tax rate of 3.07% on all taxable earned compensation, salaries, wages, tips, and bonuses. Unlike most states, Pennsylvania does not have graduated brackets, brackets adjusted for inflation, or filing status differences; every dollar of taxable compensation earned by Single, Married, and Head of Household filers is taxed at the exact same statutory rate of 3.07% under the Pennsylvania Constitution’s Uniformity Clause (Article VIII, Section 1).

No. Pennsylvania state tax law strictly disallows standard deductions and personal exemptions. Filers cannot claim a standard deduction or personal exemptions on Form PA-40, meaning taxable income for state purposes equals 100% of gross earned compensation (minus qualifying pre-tax Section 125 health deductions and allowable employee business expenses on Form PA-40 Schedule UE). However, qualifying low-income taxpayers can eliminate up to 100% of their state tax liability through Pennsylvania Tax Forgiveness (Schedule SP).

Under 72 P.S. § 7304, Pennsylvania provides a statutory poverty credit called Tax Forgiveness (claimed on PA Schedule SP) that eliminates or reduces Pennsylvania personal income tax for qualifying low-income individuals and working families. For the 2026 tax year, an unmarried filer with PA eligibility income up to $10,000 qualifies for 100% tax forgiveness ($0.00 state tax liability). Married couples qualify for 100% forgiveness with eligibility income up to $20,000, plus an additional allowance of $9,500 for each qualifying dependent child (e.g., a married family of four qualifies for 100% tax forgiveness on income up to $39,000).

Under Act 32 of 2008 (53 P.S. § 6924.101 et seq.), over 2,400 municipalities and 500 school districts across Pennsylvania levy a Local Earned Income Tax (EIT). Local tax collection is organized into 69 county-level Tax Collection Districts (TCDs) administered by collectors like Berkheimer, Keystone Collections Group, and Jordan Tax Service. In most suburban boroughs and townships, the baseline EIT rate is 1.00% (shared equally between the municipality and the local school district). By law, employers must withhold local tax based on the higher of the employee’s resident EIT rate or the work jurisdiction EIT rate.

Philadelphia is specifically exempt from Act 32 and levies its municipal income tax under the historic Sterling Act of 1932 (53 P.S. § 15971 et seq.). For the 2025–2026 tax years, the City of Philadelphia Wage Tax rate is 3.7500% (0.0375) for Philadelphia residents and 3.4400% (0.0344) for nonresidents who physically perform work inside the city limits. Unlike suburban Act 32 EIT, Philadelphia Wage Tax is administered directly by the Philadelphia Department of Revenue, and there is no sharing with suburban school districts.

Pennsylvania is one of only three U.S. states (along with Alaska and New Jersey) that mandates an employee-paid contribution to state unemployment insurance. Under Section 301.4 of the Pennsylvania Unemployment Compensation Law (43 P.S. § 781.4), employees must contribute a statutory percentage of their gross wages toward the PA UC Fund. For calendar years 2025 and 2026, the PA Department of Labor & Industry (L&I) employee withholding rate is 0.07% ($0.0007 per dollar of gross pay, or $0.70 per $1,000). Crucially, unlike Social Security, the PA UC employee deduction is UNCAPPED and applies to all gross compensation.

No! This is one of the most significant tax traps for workers moving to Pennsylvania. Under 72 P.S. § 7301 and PA Department of Revenue regulations, Pennsylvania does NOT recognize elective employee salary deferrals into traditional 401(k), 403(b), or 457(b) retirement accounts as pre-tax deductions for state income tax. While these contributions reduce your federal taxable wages (IRS Form W-2 Box 1), they remain 100% taxable for Pennsylvania state income tax (Box 16) and Local EIT. (The offsetting advantage: when you retire and take distributions from your 401(k) in Pennsylvania, distributions are 100% tax-free!).

Under PA DOR regulations, contributions to qualifying Section 125 cafeteria plans—such as employee-paid health, dental, and vision insurance premiums, Health Savings Accounts (HSA), and Flexible Spending Accounts (FSA)—are completely exempt from Pennsylvania state personal income tax, Local EIT, and PA employee UC tax. These deductions reduce Box 16 state taxable compensation.

Under 72 P.S. § 7356, Pennsylvania maintains statutory reciprocal individual income tax agreements with six states: Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia. Under these agreements, compensation earned by a resident of one state for personal services performed in another state is taxable only in their home state of residence. For example, a Pennsylvania resident commuting to work in New Jersey pays PA state tax (3.07%) and submits Form NJ-165 to their NJ employer. However, reciprocity applies STRICTLY to state-level income tax; it does NOT exempt workers from local wage taxes (such as the Philadelphia Wage Tax).

Under 53 P.S. § 6924.301, municipalities may levy a Local Services Tax (LST) on individuals working within their borders. In municipalities with an LST exceeding $10 (the legal maximum is $52.00 per year, such as in Pittsburgh and Allentown), employers must withhold the tax pro-rata per payroll period (e.g., $1.00 per week for 52 weekly paychecks, or $2.00 bi-weekly for 26 paychecks). Workers earning less than $12,000 annually in the taxing jurisdiction are legally exempt from the $52 LST upon submitting an exemption certificate.

Under the Pennsylvania Minimum Wage Act of 1968 (43 P.S. § 333.104), Pennsylvania’s statewide minimum wage is tied to the federal FLSA rate of $7.25 per hour for non-exempt hourly employees. For tipped employees, the mandatory minimum direct cash wage is $2.83 per hour, with an allowable maximum employer tip credit of $4.42 per hour (provided tips received equal at least $7.25/hr total). Under 43 P.S. § 333.114, municipalities (including Philadelphia and Pittsburgh) are preempted from enacting higher private-sector minimum wage rates.

Pennsylvania individual income tax returns (Form PA-40) and local Earned Income Tax returns (Form Local EIT) are statutory due on April 15 following the close of the calendar year (or the next business day if April 15 falls on a weekend or state holiday). Taxpayers who obtain a federal 6-month extension receive an automatic extension to October 15 for Form PA-40, provided 100% of all state tax liabilities are paid by April 15 via Form PA-40 ES or online through the myPATH portal to avoid late-payment interest.