Louisville Local Tax Guide (2026)
Understanding how local taxes work in Louisville, Kentucky, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Louisville has a local income tax that applies to income earned in the city.
- •Residents pay 2.20% on all income. Non-residents pay 1.45% on Louisville income only.
- •Local tax is separate from Kentucky 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 Louisville local tax costs at three incomes
The 2.20% resident rate is charged on top of federal tax, Kentucky state tax and FICA. Priced for 2026, a $75,000 salary loses $1,650 to Louisville alone and takes home $57,435: a combined 23.4% of gross across all four.
| Salary | Louisville tax | Kentucky tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $1,100 | $1,632 | $7,645 | $39,623 | 20.8% |
| $75,000 | $1,650 | $2,507 | $13,408 | $57,435 | 23.4% |
| $120,000 | $2,640 | $4,082 | $26,750 | $86,528 | 27.9% |
Living in Louisville rather than only working there costs 0.75 percentage points more: $563 a year on $75,000, since non-residents pay 1.45%.
How Louisville compares
Of the 62 US jurisdictions that levy a local income tax, Louisville ranks 40th 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 Louisville sits Worcester County (2.25%) and below it Marion County (Indianapolis) (2.02%).
Within Kentucky, 4 jurisdictions charge a local income tax and Louisville is the 3rd highest. Same salary, different address:
| Kentucky jurisdiction | Resident rate | Cost on $75,000 |
|---|---|---|
| Covington | 3.1497% | $2,362 |
| Lexington | 2.75% | $2,063 |
| Louisville | 2.20% | $1,650 |
| Bowling Green | 2.00% | $1,500 |
What local taxes apply in Louisville
Louisville has a local income tax that applies to income earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 2.20% | All income |
| Non-resident | 1.45% | Louisville income only |
Louisville has a local income tax that applies to income earned in the city. The rate depends on whether you're a resident or non-resident.
Louisville has a local income tax that applies to income earned in the city.
Residents: If you live in Louisville, you pay 2.20% on all your income.
Non-residents: If you work in Louisville but live elsewhere, you pay 1.45% on income earned in the city.
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How they interact with state taxes
Louisville local tax is calculated separately from Kentucky state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
Louisville local tax is calculated separately from Kentucky 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 Kentucky tax rules
For example, if you earn $100,000 in Louisville, you pay Kentucky state tax on that income, plus Louisville local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Louisville 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 Louisville local tax if:
- You live in Louisville (residents pay on all income)
- You work in Louisville but live elsewhere (non-residents pay on Louisville income only)
- You're self-employed and perform work in Louisville
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Common paycheck misconceptions
Common misunderstandings about Louisville local tax, including when it applies and how it's calculated.
Common misconceptions about Louisville local tax:
- "It's the same as state tax": False. Local tax is separate from Kentucky 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 Louisville resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Louisville local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Louisville local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Louisville resident:
- Local tax: approximately $2200 annually
- This reduces your bi-weekly paycheck by about $85
- Combined with Kentucky state tax and federal tax, the total tax burden can be significant
To see exactly how Louisville 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 Louisville local tax based on where you live and work.
Check Your Pay Stub
You're subject to Louisville local tax if:
- You live in Louisville (residents pay on all income)
- You work in Louisville but live elsewhere (non-residents pay on Louisville income only)
You're not subject to Louisville local tax if you live and work outside the city, even if you're a Kentucky resident.