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What is Pennsylvania's income tax rate?

Pennsylvania has a flat 3.07% personal income tax rate — one of the lowest flat rates in the US. There are no brackets, no standard deduction, and no personal exemption. All wage income is taxed at 3.07%. However, most PA municipalities also impose a local Earned Income Tax, making the effective combined rate significantly higher in cities.

What is the Earned Income Tax (EIT) in Pennsylvania?

Pennsylvania's 2,500+ taxing jurisdictions (municipalities and school districts) each levy their own Earned Income Tax on wages. Rates vary from 0% to 3.92% (Philadelphia resident rate). The local EIT is based on where you live (resident rate) or where you work (non-resident rate, usually lower). Your employer withholds based on your municipality of residence.

Does Pennsylvania tax retirement income?

PA is one of the most retirement-friendly states — it exempts most retirement income from state income tax, including Social Security, pension income from public/private employers (if you've reached normal retirement age), IRA and 401k distributions (if you've reached 59½), and military pensions. This makes PA particularly attractive for retirees despite relatively high property taxes.

What is the Philadelphia wage tax?

Philadelphia residents pay 3.75% wage tax (residents working anywhere) or 3.44% (non-residents working in Philadelphia). This is collected via employer withholding in addition to PA state 3.07% — making Philadelphia's combined rate 6.82% for residents. Philadelphia also has its own school income tax (SIT) on investment income.