Add local EIT — Philadelphia is brutal
Philadelphia residents pay 3.75% city wage tax on top of the 3.07% state rate — effectively 6.82% combined. Non-residents working in Philly pay 3.44%. Outside Philly, most PA municipalities charge 1% local EIT.
PA's retirement carve-out
PA exempts Social Security, pensions, and 401(k)/IRA distributions taken after age 59½. Combined with low cost of living, this makes PA one of the best states for retirees who own a paid-off home.
No standard deduction means low earners pay too
Unlike most states, PA's flat 3.07% applies from dollar one. A $30K earner pays $921 in state tax — there's no exemption to shield low-income workers.
FAQ
Does PA tax bonuses?
Yes, at the flat 3.07% state rate plus your local EIT. Federal supplemental withholding (22%) applies on top.
What is the Philadelphia wage tax?
Philly residents pay 3.75% wage tax (2026); non-residents working in Philly pay 3.44%. This is in addition to the 3.07% PA state rate.
Does PA tax 401(k) contributions?
PA taxes 401(k) contributions at the state level (no deduction) but exempts distributions after age 59½. This is opposite of federal treatment — track basis carefully.
How this calculator is built
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Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
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Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
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See our editorial policy and disclaimer. Results are estimates, not advice.