New York City Local Tax Guide (2026)
Understanding how local taxes work in New York City, New York, and how they affect your take-home pay.
Last updated: September 3, 2026
- •New York City has a local income tax that applies to income earned in the city.
- •Residents pay 3.88% on all income. Non-residents pay 0.41% on New York City income only.
- •Local tax is separate from New York 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 local taxes apply in New York City
New York City has a local income tax that applies to income earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 3.88% | All income |
| Non-resident | 0.41% | New York City income only |
New York City 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.
New York City has a city income tax that applies to both residents and non-residents who work in the city. The tax is separate from New York State income tax and is calculated on your taxable income.
Residents: If you live in New York City, you pay the resident rate of 3.88% on all your income, regardless of where you work.
Non-residents: If you work in New York City but live elsewhere, you pay the non-resident rate of 0.41% on income earned in the city.
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How they interact with state taxes
New York City local tax is calculated separately from New York state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
New York City local tax is calculated separately from New York 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 New York tax rules
For example, if you earn $100,000 in New York City, you pay New York state tax on that income, plus New York City local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to New York City 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 New York City tax if:
- You live in New York City (residents pay on all income)
- You work in New York City but live elsewhere (non-residents pay on NYC income only)
- You're self-employed and perform work in New York City
You're not subject to NYC tax if you live and work outside the city, even if you're a New York State resident.
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Common paycheck misconceptions
Common misunderstandings about New York City local tax, including when it applies and how it's calculated.
Common misconceptions about New York City tax:
- "I only pay if I live in NYC": False. Non-residents who work in NYC also pay the non-resident rate.
- "It's the same as state tax": False. NYC tax is separate from New York State tax and is calculated independently.
- "Remote work means no tax": If you're a NYC resident, you pay on all income regardless of where you work. Non-residents only pay on NYC-sourced income.
Take-home pay impact
New York City local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
New York City tax significantly impacts take-home pay, especially for residents. For example, if you earn $150,000 as a NYC resident:
- NYC tax: approximately $5814 annually
- This reduces your bi-weekly paycheck by about $224
- Combined with NY State tax (up to 8.82%) and federal tax, high earners can face a combined marginal rate exceeding 50%
To see exactly how New York City 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.
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Does this apply to you?
Determine whether you're subject to New York City local tax based on where you live and work.
Check Your Pay Stub
You're subject to New York City local tax if:
- You live in New York City (residents pay on all income)
- You work in New York City but live elsewhere (non-residents pay on New York City income only)
You're not subject to New York City local tax if you live and work outside the city, even if you're a New York resident.