Allentown Local Tax Guide (2026)
Understanding how local taxes work in Allentown, Pennsylvania, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Allentown has a local wage tax that applies to wages and salaries earned in the city.
- •Residents pay 1.975% on all wages. Non-residents pay 1.28% on Allentown wages only.
- •Local tax is separate from Pennsylvania state tax and federal tax. Both are calculated independently and add to your total tax burden.
- •Local tax directly reduces your take-home pay. Combined with state and federal taxes, the total tax burden can be significant for high earners.
What Allentown local tax costs at three incomes
The 1.975% resident rate is charged on top of federal tax, Pennsylvania state tax and FICA. Priced for 2026, a $75,000 salary loses $1,481 to Allentown alone and takes home $57,809: a combined 22.9% of gross across all four.
| Salary | Allentown tax | Pennsylvania tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $988 | $1,535 | $7,645 | $39,832 | 20.3% |
| $75,000 | $1,481 | $2,303 | $13,408 | $57,809 | 22.9% |
| $120,000 | $2,370 | $3,684 | $26,750 | $87,196 | 27.3% |
Living in Allentown rather than only working there costs 0.69 percentage points more: $521 a year on $75,000, since non-residents pay 1.28%.
How Allentown compares
Of the 62 US jurisdictions that levy a local income tax, Allentown ranks 44th by resident rate. The median is 2.50%, the highest is New York City at 3.078%–3.876%, and the lowest is St. Louis at 1.00%. Immediately above Allentown sits Gadsden (2.00%) and below it Cincinnati (1.80%).
Within Pennsylvania, 6 jurisdictions charge a local income tax and Allentown is the 5th highest. Same salary, different address:
| Pennsylvania jurisdiction | Resident rate | Cost on $75,000 |
|---|---|---|
| Philadelphia | 3.735% | $2,801 |
| Reading | 3.60% | $2,700 |
| Scranton | 3.40% | $2,550 |
| Pittsburgh | 3.00% | $2,250 |
| Allentown | 1.975% | $1,481 |
| Erie | 1.65% | $1,238 |
What local taxes apply in Allentown
Allentown has a local wage tax that applies to wages and salaries earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 1.975% | All wages |
| Non-resident | 1.28% | Allentown wages only |
Allentown has a local wage tax that applies to wages and salaries earned in the city. The rate depends on whether you're a resident or non-resident.
Allentown has a local wage tax that applies to wages and salaries earned in the city.
Residents: If you live in Allentown, you pay 1.975% on all your wages.
Non-residents: If you work in Allentown but live elsewhere, you pay 1.28% on wages earned in the city.
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How they interact with state taxes
Allentown local tax is calculated separately from Pennsylvania state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
Allentown local tax is calculated separately from Pennsylvania state income tax. This means:
- Local tax is in addition to state tax, not instead of it
- Both taxes are calculated on your taxable income (or wages, depending on the tax type)
- Your employer withholds both local and state taxes from your paycheck
- You may be able to deduct local tax on your state tax return, depending on Pennsylvania tax rules
For example, if you earn $100,000 in Allentown, you pay Pennsylvania state tax on that income, plus Allentown local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Allentown local tax if you live in the city or work in the city, depending on whether you're a resident or non-resident.
You're subject to Allentown local tax if:
- You live in Allentown (residents pay on all wages)
- You work in Allentown but live elsewhere (non-residents pay on Allentown wages only)
- You're self-employed and perform work in Allentown
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Common paycheck misconceptions
Common misunderstandings about Allentown local tax, including when it applies and how it's calculated.
Common misconceptions about Allentown local tax:
- "It's the same as state tax": False. Local tax is separate from Pennsylvania state tax and is calculated independently.
- "I only pay if I live there": False. Non-residents who work in the city also pay.
- "Remote work means no tax": If you're a Allentown resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Allentown local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Allentown local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Allentown resident:
- Local tax: approximately $1975 annually
- This reduces your bi-weekly paycheck by about $76
- Combined with Pennsylvania state tax and federal tax, the total tax burden can be significant
To see exactly how Allentown local tax affects your paycheck, use our calculator above. You can adjust your income, filing status, and deductions to see how different scenarios affect your net pay.
Want to see this with your numbers? Try the calculator with your numbers →
Does this apply to you?
Determine whether you're subject to Allentown local tax based on where you live and work.
Check Your Pay Stub
You're subject to Allentown local tax if:
- You live in Allentown (residents pay on all wages)
- You work in Allentown but live elsewhere (non-residents pay on Allentown wages only)
You're not subject to Allentown local tax if you live and work outside the city, even if you're a Pennsylvania resident.