Pennsylvania Income Tax Calculator

How to Use This Pennsylvania Income Tax Calculator

This Pennsylvania income tax calculator estimates your annual PA state and federal tax liability for 2025 and 2026. Enter your gross wages, filing status, and any deductions above. Pennsylvania applies a flat 3.07% state income tax on all taxable income, with no standard deduction or personal exemption.

Select your locality if you live or work in Philadelphia, Pittsburgh, Reading, Scranton, or another PA municipality with a local earned income tax. The calculator adds the applicable local rate to your PA state tax for a complete state+local picture. For per-paycheck withholding, use the Pennsylvania paycheck calculator.

Key difference from other states: Pennsylvania does not recognize 401(k) or Section 125 pre-tax contributions as deductions from PA taxable income. The calculator applies 3.07% to your full gross wages regardless of pre-tax deduction amounts entered.

How Pennsylvania's Flat 3.07% Tax Works

Pennsylvania has one of the simplest income tax structures in the US: a flat 3.07% rate on all taxable income. There are no brackets, no standard deduction, and no personal exemption. Every dollar earned by a Pennsylvania resident is taxed at 3.07%, from the first dollar to the millionth.

While 3.07% sounds low — and it is, compared to New York's rates of 3.9%–10.9% or California's 1%–13.3% — Pennsylvania's broader tax base means the effective rate equals the nominal rate for most workers. There is nothing to deduct before the rate applies:

• No standard deduction (unlike most states)
• No personal exemption
• 401(k) contributions are taxable (unlike nearly every other state)
• Health insurance premiums through Section 125 plans are taxable for PA purposes

For comparison, a New Jersey resident earning $75,000 pays NJ income tax starting at 1.4% and reaching 5.525% at that income level, with a $1,000 exemption. A Pennsylvania resident at the same income pays 3.07% flat — often similar total state tax, but calculated very differently.

Pennsylvania's Unique 401(k) and Pre-Tax Contribution Rules

Pennsylvania is one of only a few states that does not recognize traditional 401(k) or Section 125 contributions as pre-tax for state income tax purposes. This creates a tax situation unlike most states and is critical to understand when planning your PA tax liability:

How It Works on Your W-2

Your employer reports two different wage amounts on your W-2 each year:

• Box 1 (Federal wages) — reduced by your 401(k) and Section 125 pre-tax contributions.
• Box 16 (PA state wages) — your full gross wages, with no reduction for 401(k) or pre-tax health insurance.

Example: $80,000 gross wages, $10,000 401(k), $5,000 pre-tax health insurance. Federal taxable wages (Box 1): $65,000. Pennsylvania taxable wages (Box 16): $80,000. PA state tax: $80,000 × 3.07% = $2,456.

The Retirement Offset

Because PA already taxes your 401(k) contributions, you build a cost basis in your plan. When you take qualified distributions in retirement (generally after age 59½), the portion attributable to your previously-taxed PA contributions is exempt from PA income tax. Many PA retirees pay little or no PA state tax on 401(k) withdrawals — a benefit that partially compensates for paying PA tax on contributions.

Philadelphia and Pennsylvania Local Earned Income Taxes

In addition to the 3.07% state flat rate, many Pennsylvania municipalities levy a local earned income tax (EIT) through county Tax Collection Districts:

Philadelphia

Philadelphia has the highest local wage tax in Pennsylvania. Philadelphia residents pay a 3.75% resident Wage Tax on all wages earned anywhere. Non-residents working in Philadelphia pay a 3.44% non-resident Wage Tax. Combined with the 3.07% state rate, Philadelphia residents face a state+local income tax rate of 6.82% — higher than the total state income tax rates of many other states.

Pittsburgh and Other Cities

Pittsburgh residents and workers pay a 3.0% city earned income tax. Reading charges 3.6% and Scranton 3.4%. Hundreds of other townships and boroughs levy EIT rates typically between 1% and 2%. Select your municipality in the calculator's locality dropdown to include local EIT in your annual tax estimate.

Step-by-Step Example — $75,000 Pennsylvania Single Filer (2026)

Full annual tax calculation for a single Pennsylvania resident (outside Philadelphia) earning $75,000 with $5,000 in 401(k) contributions:

1. Gross wages: $75,000
2. Federal standard deduction: −$16,100 → federal taxable income: $58,900 (further reduced by $5,000 401(k) = $53,900 federal taxable wages)
3. Federal income tax (10%–22% brackets on $53,900): ≈ $6,440
4. FICA (on $70,000 wages after 401(k)): $70,000 × 7.65% = $5,355
5. PA state taxable wages: $75,000 (full gross — no PA deduction for 401(k))
6. PA income tax: $75,000 × 3.07% = $2,303
7. Total taxes: $6,440 + $5,355 + $2,303 = $14,098
8. Annual net income: $75,000 − $14,098 = $60,902

Adding Philadelphia Wage Tax ($75,000 × 3.75% = $2,813) brings total taxes to $16,911 and net income to $58,089. Use the general income tax calculator to compare Pennsylvania against other states side by side.

How to Reduce Your Pennsylvania Annual Tax Liability

Pennsylvania's limited pre-tax deduction recognition reduces the state-level benefit of most payroll strategies, but several options remain:

• PA 529 Contributions— Pennsylvania offers a state income tax deduction of up to $18,000 per beneficiary per year (single filer) or $36,000 (MFJ) for contributions to a Pennsylvania 529 college savings plan. At 3.07%, a $10,000 contribution saves $307 in PA state tax. This is one of PA's few meaningful above-the-line deductions from taxable income.
• Consider a Roth 401(k) — since PA taxes 401(k) contributions anyway, a Roth 401(k) creates no additional PA tax burden compared to a traditional 401(k). Roth withdrawals in retirement are fully PA-exempt, making them potentially more tax-efficient for PA residents than traditional 401(k)s.
• Traditional 401(k) still reduces federal and FICA— even though PA taxes 401(k) contributions, a $15,000 traditional 401(k) contribution saves $3,300 federal income tax (22%) + $1,148 FICA = $4,448, minus $461 extra PA tax = net savings of $3,987. Still very worthwhile despite PA's non-conformity.
• Retirement income planning — Pennsylvania exempts most retirement income (Social Security, pensions, 401(k)/IRA distributions after 59½). High earners may benefit from deferring more income to retirement years when PA income tax on distributions is zero.
• Philadelphia residents: commuter credit— if you live in Philadelphia but paid wage taxes to another jurisdiction, you may claim a credit on your PA state return. Review Form PA-40 and Philadelphia's Earnings Tax instructions for details.

Tax Disclaimer

This calculator provides estimates for informational purposes only. It is not tax advice. Pennsylvania's 3.07% flat rate and local earned income tax rates are subject to change by the Pennsylvania General Assembly and individual municipalities. Philadelphia Wage Tax rates are set by Philadelphia City Council annually. The calculator applies 3.07% to full gross wages without reduction for 401(k) or Section 125 contributions, consistent with current PA Department of Revenue guidance. Consult a qualified Pennsylvania CPA or tax professional for guidance on your specific situation and for the latest PA-40 instructions.