What Changes in Your Paycheck in Pennsylvania
Your paycheck in Pennsylvania shows a Pennsylvania state income tax line item at a flat 3.07% rate—the same percentage whether you earn $1 or $1. For a $1 salary, that's ~ $1 annually (~ $1 per biweekly paycheck). Many Pennsylvanians also see local income tax deductions on their paycheck, varying by work location. Philadelphia residents see a separate 3.87% wage tax line item (for residents) or 3.48% (for non-residents), meaning a $1 salary in Philadelphia might show $1 state plus $1 local ($1 total, ~ $1 per biweekly paycheck). The flat rate means your state tax increases linearly with income, unlike progressive states where tax increases accelerate with higher brackets.
Example State Tax in Pennsylvania
What you'll pay in Pennsylvania state income tax at different salary levels (single filer, no deductions):
| Gross Salary | State Tax (Year) | Effective Rate |
|---|---|---|
| $50,000 | $1,535 | 3.1% |
| $75,000 | $2,303 | 3.1% |
| $100,000 | $3,070 | 3.1% |
| $150,000 | $4,605 | 3.1% |
Use the calculator above to see your exact take-home pay with your filing status and deductions.
Pennsylvania Income Tax Rate
3.07% flat rate
Everyone pays 3.07% of taxable income, regardless of income level or filing status.
Key Facts That Affect Your Take-Home Pay
- Pennsylvania uses a flat 3.07% income tax rate for all income levels and filing statuses—unlike federal taxes or states with graduated brackets, your Pennsylvania tax percentage stays the same whether you earn $1 or $1. This makes the state attractive for high earners but regressive for lower earners.
- Pennsylvania's flat tax rate means everyone pays the same 3.07% rate regardless of income level, creating a simple but potentially regressive system where lower earners pay a larger percentage of their take-home pay toward state tax than higher earners.
- Many Pennsylvania cities and municipalities levy additional local income taxes (called earned income tax or EIT) on top of the state rate, ranging from 0.5% to 3%+ depending on where you work and live. Philadelphia has a 3.87% wage tax for residents and 3.48% for non-residents, creating combined rates that can exceed 6%-7% for city residents.
Is Pennsylvania Better for You?
Pennsylvania works well for:
Pennsylvania works well for high earners who benefit from the flat rate structure. In states with progressive brackets, someone earning $1 might pay 8%-10% effective state tax. In Pennsylvania, that same person pays a flat 3.07%, resulting in lower total state tax despite Pennsylvania's reputation. This makes Pennsylvania attractive for executives, tech professionals, and anyone whose income already puts them in top federal brackets Retirees 60+ also benefit from exemptions on retirement income.
Pennsylvania may not be ideal if:
Pennsylvania is challenging for lower-income workers, single filers, and residents of high-local-tax municipalities like Philadelphia. While 3.07% seems modest, it's a larger percentage of take-home pay for someone earning $1 compared to someone earning $1. Flat taxes are regressive in their effective impact—they take a larger relative chunk from lower earners' ability to cover necessities Philadelphia residents face combined state-plus-local rates of 6.94%+, making the city expensive even with the flat state rate. If you're early in your career or earning below median income, you might keep more net pay in states with progressive brackets that exempt low-income earners or in zero-tax states.
Common Mistakes People Make
Misconception: 'Flat tax means low tax.' Pennsylvania's 3.07% flat rate isn't necessarily low—it's simple, but not necessarily cheap. For someone earning $1, that 3.07% is $1, which could be more than they'd pay in a progressive state with generous lower brackets. The 'flat tax' label sounds appealing, but it doesn't automatically mean you'll pay less than in states with graduated brackets.
Misconception: 'The 3.07% is all I'll pay to the state.' Many Pennsylvania localities add income taxes on top of the state rate. Philadelphia residents pay 3.87% local wage tax plus 3.07% state tax (6.94% combined), while other cities might add 0.5%-2%+ local taxes. Your combined state-plus-local rate could be 4%-7%+ depending on where you work and live, not just the flat 3.07% state rate.
Misconception: 'Everyone pays the same percentage, so it's fair.' While everyone pays the same 3.07% rate in Pennsylvania, the economic impact is different. 3.07% of a $1 salary ($1) represents a larger share of disposable income than 3.07% of $1 ($1). Flat taxes are proportionally equal, but not necessarily equitable in terms of real-world impact on people's financial lives—lower earners pay a larger percentage of their ability to cover necessities.
One Thing to Know
Pennsylvania's 3.07% state rate is one of the lowest flat rates in the nation, but many cities add local earned income taxes (EIT) that can range from 0.5%-3.87%. Philadelphia's 3.87% wage tax means city residents pay nearly 7% combined (state plus local), which surprises people who assume the 3.07% state rate is their total tax burden.
Important Notes
These calculations are estimates based on current tax law. Your actual take-home pay varies based on:
- Pre-tax deductions (401(k), health insurance, HSA, etc.)
- Your W-4 withholding elections
- Additional income or deductions at tax time
- Individual circumstances and tax situations
Tax rates are subject to change. Federal and state tax laws may be updated annually. This is not tax advice. For personalized help, consult a tax professional familiar with Pennsylvania tax laws.