Local income taxes on wages

Our rules cover local taxes on wages in 11 states: Alabama, Colorado, Indiana, Kentucky, Maryland, Michigan, Missouri, New York, Ohio, Oregon and Pennsylvania. A few others, such as Delaware with Wilmington’s earned income tax, have isolated local taxes that the paycheck calculator handles through its “Other / not listed” option. Everywhere else, the state is the only tax on wages below the federal level.

Three kinds of local tax

Local taxes on pay fall into three groups, and the kind decides who pays.

Percentage taxes on residents. New York City and Yonkers tax the people who live there, wherever they work. A New York City resident on $75,000 pays $2,661 of city tax in a year. A New Jersey resident who commutes to a Manhattan office pays $0: the city’s commuter tax was repealed decades ago. Maryland’s county taxes and Indiana’s county taxes are also residence-based, with a twist in Indiana, where the county you lived in on January 1 sets your rate for the whole year.

Percentage taxes on work, with a resident rate. Philadelphia, Detroit, Kansas City, St. Louis, Louisville and most Ohio cities tax everyone who works there, and charge their own residents too, even when they work elsewhere. Residents usually pay the higher rate. Philadelphia’s wage tax is 3.735% for residents and 3.425% for non-residents; on $75,000 that is $2,801 for someone living in the city and $2,569 for someone driving in from Bucks County. Detroit charges residents 2.4% and non-residents 1.2%.

Flat head taxes. Denver’s occupational privilege tax is $5.75 a month, $69 a year, for anyone working in the city who earns at least $500 a month there. Pennsylvania’s local services tax works the same way: a fixed yearly charge, $52 in Pittsburgh, deducted in small amounts from each paycheck.

Pennsylvania: every municipality and school district

Pennsylvania has the most complicated system in the country. Almost every municipality and school district levies an earned income tax, and the combined resident rate depends on the exact political subdivision you live in, identified by a six-digit PSD code. Our rules hold the rates for all 66 counties. Employers withhold the higher of your home rate and your work location’s non-resident rate, and the tax goes to a county tax collection bureau rather than to the city itself.

Pittsburgh’s resident earned income tax is 3%, the city and school district combined. With the local services tax, a Pittsburgh resident on $75,000 pays $2,302 a year. Philadelphia sits outside the earned income tax system and runs its own wage tax, which is why its figures differ so much from its suburbs.

If you live in Pennsylvania, look up your PSD code with the state’s local income tax lookup and give it to payroll. The most common mistake on Pennsylvania stubs is a code for the work location instead of the home.

Ohio: city taxes and credits

Ohio cities and villages tax wages earned within their limits, and most also tax their residents. Columbus charges 2.5%, which takes $1,875 a year from $75,000. When you live in one Ohio city and work in another, your home city usually gives a credit for the tax paid to the work city, but often only part of it. The rest is due with the home city’s own return. Our calculator covers 6 of the largest Ohio cities; the regional agencies RITA and CCA list the rest.

Maryland and Indiana: county taxes collected with the state

Maryland’s 24 local jurisdictions, its counties plus Baltimore City, each set a local income tax, collected on the state return and withheld alongside state tax. A Baltimore City resident on $75,000 pays $2,189 of it. Indiana works the same way across its 92 counties. In both states the local line on the pay stub often looks like part of the state line, so check the withholding certificate: Maryland’s MW 507 and Indiana’s WH-4 ask for the county.

Oregon: the Portland area’s high-income taxes

Portland-area workers face three local taxes: the statewide transit tax, TriMet’s transit payroll tax for employers, and two personal income taxes that only start at high incomes, Multnomah County’s Preschool for All tax and Metro’s supportive housing tax. On $75,000 the county tax is $0; at $250,000 it is $1,250. Employers withhold them only once pay crosses the threshold during the year, and many high earners pay them by estimated payment instead.

Every place we cover

Single filer, paid every two weeks, no pre-tax deductions. The commuter column assumes a home in a part of the same state with no local tax of its own.

The highest bill in the table, for someone who lives and works in the same place, is in Philadelphia: $2,801 a year on $75,000. Each place has its own page, linked above, with rates, a worked example at the state’s median wage and a common commute.

Remote work and local tax

Local taxes follow where the work is done, so working from home changes them. A Philadelphia employee who works from a home in the suburbs generally owes no wage tax for the days worked at home, but the employer will keep withholding unless told otherwise, and the refund has to be claimed from the city with records of the days. Ohio cities have their own rules for remote days. New York City residents pay city tax wherever they work, so remote work changes nothing for them.

If you move during the year, update both the state and the local details with payroll. Local taxes are the item payroll systems most often miss, and the bill for a missed year arrives with interest.

Every figure on this page is computed by the same code as our calculators. How we calculate.