Overview of Pennsylvania Taxes
Pennsylvania has a flat state income tax rate of 3.07%. This is the lowest rate among the handful states that utilize flat rates. However, many cities in the Keystone State also collect local income taxes. There are 2,938 taxing jurisdictions with rates ranging as high as 3.8398% in Philadelphia, 3.6% in Reading and 3.4% in Scranton.
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Pennsylvania Paycheck Calculator
Pennsylvania Paycheck Quick Facts
- Pennsylvania income tax rate: 3.07%
- Median household income: $73,170 (U.S. Census Bureau)
- Number of municipalities and school districts that have local income taxes: 2,938
How Your Pennsylvania Paycheck Works
Without the help of a paycheck calculator, it’s tricky to figure out what your take-home pay will be after taxes and other monies are withheld. For starters, all Pennsylvania employers will withhold federal and state income taxes from your paychecks, as well as FICA taxes. Depending on where in the state you live, you will likely also pay local income taxes.
The amount of federal income taxes withheld will depend on your income level and the withholding information that you put on your Form W-4. The IRS made notable updates to the W-4 in recent years. Instead of using allowances, the new form applies a five-step process that requires filers to prove and enter annual dollar amounts for any additional income or jobs, along with some other personal information.
As for your FICA taxes, 6.2% of your income goes to Social Security taxes. Your employer is responsible for matching this amount for a total of 12.4% that the government receives to fund the program. Medicare taxes follow a similar process, with 1.45% being collected from both you and your employer (for a total of 2.9%). Any income you have in excess of $200,000 is subject to an additional Medicare surtax of 0.9% (your employer doesn’t match this surtax). Together, Social Security and Medicare taxes make up FICA (Federal Insurance Contributions Act) taxes.
If you’re self-employed, you are responsible for paying the full FICA taxes yourself. Luckily, there is a tax deduction that you can take when you file your taxes in order to alleviate the burden of that high self-employment tax.
Whether you work for Philadelphia International Airport or the University of Pittsburgh, your employer also withholds money from your paychecks to pay federal income taxes. These taxes are withheld from your pay throughout the year to cover a range of public expenses. How much your employer withholds in federal income taxes depends on factors like your salary, your marital status and whether or not you choose to have additional tax withheld from your paychecks.
Pennsylvania levies a flat state income tax rate of 3.07%. Therefore, your income level and filing status will not affect the income tax rate you pay at the state level. Pennsylvania is one of just eight states that has a flat income tax rate, and of those states, it has the lowest rate. Just like federal income taxes, your employer will withhold money to cover this state income tax.
Pennsylvania also levies local income taxes in more than 2,400 municipalities. And of Pennsylvania’s 500 school districts, 469 of them levy a local income tax. The table below lists the local income tax rates in some of the state's biggest cities.
A financial advisor can help you understand how taxes fit into your overall financial goals. Finding a financial advisor doesn't have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
How You Can Affect Your Pennsylvania Paycheck
The best way to have an impact on your paycheck, and in turn your taxes, is to fine-tune them by opting for an additional dollar withholding from each of your paychecks. There is a line on the W-4 where you can enter the amount of additional withholding you’d like. So if you wanted your employer to withhold an additional $20 from each paycheck, you’d write "20" on that line of your W-4. Note that although this will result in slightly smaller paychecks each pay period, your tax bill may turn into a refund come tax time.
Unlike most other states in the U.S., Pennsylvania does not exempt contributions to 401(k)s, 403(b)s and other retirement accounts from income taxes and withholdings. However, once you reach retirement and begin taking distributions, you won't be taxed on any of your money, investment earnings included.
Health savings accounts (HSAs) and flexible spending accounts (FSAs) work normally, though. You contribute pre-tax money so that you can use it later for certain medical-related expenses, like copays. Keep in mind, though, that only $500 rolls over from one year to the next in an FSA. That means you’ll lose money if you contribute more than $500 but don’t use it before the end of the year (as of 2023). This amount increases to $610 in 2024 and $650 in 2025. If you contribute more than the year's limit to an FSA but you don’t use it all within the year, you can kiss it goodbye.
