Local Occupational Tax Calculator
Many US cities impose a local occupational tax (also called a city wage tax or earned income tax) on wages and salaries earned by residents or by workers employed within city limits. The tax rate multiplied by gross wages gives the amount owed. Common examples include Philadelphia's wage tax, Louisville's occupational tax, and the city income taxes levied across Kentucky, Ohio, and West Virginia. Enter your gross wages and your city's occupational tax rate to estimate your annual and monthly tax obligation.
Occupational tax formula
Annual Tax = Gross Wages x (Rate / 100)
Monthly Withholding = Annual Tax / 12
The occupational tax is a flat percentage of gross wages. Unlike income taxes, there are typically no deductions or exemptions for local occupational taxes. Some jurisdictions exclude certain types of compensation (such as pension income or employer contributions); verify the taxable wage base with your local authority.
How local occupational taxes are collected
Employers are generally required to withhold the occupational tax from employees' paychecks and remit it to the local tax authority. Self-employed individuals typically pay estimated occupational taxes quarterly. Non-residents who work in a city with a wage tax must also pay, often at a reduced rate compared to residents.
Local occupational tax FAQ
What is a local occupational tax?
A local occupational tax (also called a city wage tax or earned income tax) is levied by some cities and counties on wages, salaries, and self-employment income earned within their jurisdiction. The tax is separate from state and federal income taxes.
Which cities have an occupational or wage tax?
Prominent examples include Philadelphia (PA) at 3.75% for residents, Pittsburgh (PA), Louisville (KY), Cincinnati (OH), and cities in Kentucky and West Virginia. New York City's city income tax functions similarly. Rates and structures vary widely by city.
Is the local occupational tax based on where I live or where I work?
It depends on the city's rules. Some cities tax only residents on all income; others tax non-residents on wages earned within city limits; some do both at different rates. Check with the specific city's tax authority for the rules that apply to your situation.
Can I get a credit for local taxes paid to more than one jurisdiction?
Many states and cities allow a credit for local taxes paid to another jurisdiction to prevent double taxation. For example, if you live in one city and work in another, you may be able to offset your residential city's tax with the tax you paid to the work city. Rules vary by state.
Where do I find the occupational tax rate for my city?
Contact your city or county revenue department directly. Many Kentucky cities publish their rates through the Kentucky Department of Revenue. Pennsylvania local tax rates are available through the Pennsylvania Department of Community and Economic Development (DCED).
Official sources
- Pennsylvania DCED Local Tax Information: Act 32 Local Earned Income Tax.
- Kentucky Department of Revenue: revenue.ky.gov - occupational license tax information.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.