Pennsylvania's 3.07% Flat Income Tax
Pennsylvania applies a flat 3.07% tax on all taxable income. Unlike progressive systems where higher income pushes you into higher brackets, every dollar in Pennsylvania is taxed at the same rate. This simplifies calculations and means your marginal and effective state tax rates are identical (or nearly so). On $85,000, state tax is $2,610/year. On $200,000, it's $6,140/year. The proportionality is straightforward.
Local Income Taxes in Pennsylvania
Several Pennsylvania jurisdictions levy their own income taxes on top of the state rate: Philadelphia: 3.75% flat rate; Pittsburgh: 3% flat rate; Scranton: 3.4% flat rate; Reading: 3.6% flat rate. These local taxes can add $1,000-$5,000+ to your annual tax bill depending on income level and jurisdiction. The calculator above includes all 4 local tax jurisdictions we track for Pennsylvania — select your city or county from the dropdown to see the combined impact. If you're considering relocating within Pennsylvania, the local tax difference between jurisdictions can shift your take-home pay by $50-$200+ per paycheck.
Maximizing Your Take-Home Pay in Pennsylvania
The most effective lever for increasing take-home pay in Pennsylvania is pre-tax retirement contributions. A traditional 401(k) contribution reduces your taxable income for both federal and state taxes. At $85,000 in Pennsylvania, your combined marginal rate (federal + state) is approximately 25%. Every $100 directed to a pre-tax 401(k) saves $25 in taxes — you sacrifice $75 in take-home pay, not $100. HSA contributions (if you have a high-deductible health plan) go further — they reduce federal, state, AND FICA taxes, saving roughly 33% on every contributed dollar.