Reading Local Tax Guide (2026)
Understanding how local taxes work in Reading, Pennsylvania, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Reading has a local wage tax that applies to wages and salaries earned in the city.
- •Residents pay 3.60% on all wages. Non-residents pay 1.00% on Reading 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 Reading local tax costs at three incomes
The 3.60% resident rate is charged on top of federal tax, Pennsylvania state tax and FICA. Priced for 2026, a $75,000 salary loses $2,700 to Reading alone and takes home $56,590: a combined 24.5% of gross across all four.
| Salary | Reading tax | Pennsylvania tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $1,800 | $1,535 | $7,645 | $39,020 | 22.0% |
| $75,000 | $2,700 | $2,303 | $13,408 | $56,590 | 24.5% |
| $120,000 | $4,320 | $3,684 | $26,750 | $85,246 | 29.0% |
Living in Reading rather than only working there costs 2.60 percentage points more: $1,950 a year on $75,000, since non-residents pay 1.00%.
How Reading compares
Of the 62 US jurisdictions that levy a local income tax, Reading ranks 3rd 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 Reading sits Philadelphia (3.735%) and below it Scranton (3.40%).
Within Pennsylvania, 6 jurisdictions charge a local income tax and Reading is the 2nd 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 Reading
Reading has a local wage tax that applies to wages and salaries earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 3.60% | All wages |
| Non-resident | 1.00% | Reading wages only |
Reading 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.
Reading has a local wage tax that applies to wages and salaries earned in the city.
Residents: If you live in Reading, you pay 3.60% on all your wages.
Non-residents: If you work in Reading but live elsewhere, you pay 1.00% on wages earned in the city.
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How they interact with state taxes
Reading 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
Reading 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 Reading, you pay Pennsylvania state tax on that income, plus Reading local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Reading 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 Reading local tax if:
- You live in Reading (residents pay on all wages)
- You work in Reading but live elsewhere (non-residents pay on Reading wages only)
- You're self-employed and perform work in Reading
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Common paycheck misconceptions
Common misunderstandings about Reading local tax, including when it applies and how it's calculated.
Common misconceptions about Reading 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 Reading resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Reading local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Reading local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Reading resident:
- Local tax: approximately $3600 annually
- This reduces your bi-weekly paycheck by about $138
- Combined with Pennsylvania state tax and federal tax, the total tax burden can be significant
To see exactly how Reading 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 Reading local tax based on where you live and work.
Check Your Pay Stub
You're subject to Reading local tax if:
- You live in Reading (residents pay on all wages)
- You work in Reading but live elsewhere (non-residents pay on Reading wages only)
You're not subject to Reading local tax if you live and work outside the city, even if you're a Pennsylvania resident.