How Louisville taxes your pay
Louisville Metro charges an occupational license tax on pay for work done in Jefferson County. Residents pay a higher rate than commuters because their rate includes the school board tax, which people who live outside the county do not pay.
The tax follows the work, not the home: a Louisville resident who works in Oldham County pays no Louisville tax on that job. Southern Indiana commuters have no Kentucky state tax withheld, thanks to the Indiana–Kentucky reciprocal agreement, but they do pay the Louisville tax.
Louisville tax rates for 2026
- Louisville Metro occupational license tax: 2.2% of pay for residents and 1.45% for people who live elsewhere, on pay for work done here only.
| Salary | Live and work here | Work here, live elsewhere in Kentucky | Take-home, living here | Take-home with no local tax |
|---|---|---|---|---|
| $40,000 | $880 | $580 | $32,158 | $33,038 |
| $60,000 | $1,320 | $870 | $47,087 | $48,407 |
| $75,000 | $1,650 | $1,088 | $57,435 | $59,085 |
| $100,000 | $2,200 | $1,450 | $73,597 | $75,798 |
| $150,000 | $3,300 | $2,175 | $105,359 | $108,659 |
| $250,000 | $5,500 | $3,625 | $169,050 | $174,550 |
The commuter column assumes a home elsewhere in Kentucky with no local tax of its own; a home city or county with its own tax can add to it or credit it.
Worked example: the Kentucky median wage in Louisville
The median annual wage in Kentucky is $46,920: half of all jobs pay more and half pay less, in the Bureau of Labor Statistics wage survey for May 2025 (all occupations; survey date May 31, 2025). Paid every two weeks as a single filer, with no 401(k) or benefits, that salary works out like this in Louisville, Kentucky.
| Line | Each paycheck | Year |
|---|---|---|
| Gross pay | $1,804.62 | $46,920.00 |
| Federal income tax | $132.71 | $3,450.44 |
| Social Security | $111.89 | $2,909.13 |
| Medicare | $26.17 | $680.42 |
| Kentucky income tax | $58.64 | $1,524.63 |
| Louisville Metro occupational license tax | $39.70 | $1,032.20 |
| Take-home pay | $1,435.51 | $37,323.18 |
You keep 79.5% of gross pay. Of the $9,597 withheld, federal income tax is the largest part at $3,450, followed by Social Security at $2,909.
Without the local tax the same salary would leave $38,355 a year in Kentucky, so living and working in Louisville costs $1,032 a year, or 2.2% of pay.
Live in Indiana, work in Louisville
On the same $46,920 salary, take-home pay in this case comes to $37,815 a year, $492 more than living and working in Louisville.
| Line | Year |
|---|---|
| Kentucky income tax | $0 |
| Indiana income tax | $1,384 |
| Louisville Metro occupational license tax | $680 |
| Take-home pay | $37,815 |
Enter both states in the calculator ("I live in a different state") to run this with your own pay.
Louisville paycheck questions
How much is Louisville local tax on $75,000 a year?
$1,650 for the year if you live and work in Louisville, single and paid every two weeks, and $1,088 if you work there but live elsewhere in Kentucky. That leaves $57,435 after all taxes, against $59,085 with no local tax.
Do I pay Louisville tax if I live there but work somewhere else?
No. Louisville's tax follows the job, so pay for work done outside it is not taxed here.
What is the Kentucky median wage after tax in Louisville?
The median wage in Kentucky is $46,920 (Bureau of Labor Statistics, May 2025). Living and working in Louisville, that leaves $37,323 a year after federal, Kentucky, FICA and $1,032 of local tax.
What does a paycheck look like in Louisville?
At the Kentucky median wage, paid every two weeks, each paycheck is $1,804.62 before tax and $1,435.51 after it. $39.70 of that goes to Louisville, next to $132.71 of federal income tax and $58.64 for Kentucky.
How much Louisville tax is withheld on $250,000?
$5,500 for the year living and working there, which leaves $169,050 after every tax, against $174,550 with no local tax.
What if I live in Indiana and work in Louisville?
On $46,920, take-home pay comes to $37,815 a year, against $37,323 living and working in Louisville. Enter both states in the calculator to see each line.
Sources
Rules checked . How we calculate.