Pennsylvania Income Tax Calculator 2025
Pennsylvania State Tax Quick Facts (2025)
- Tax System: Flat Tax (same rate for everyone)
- Tax Rate: 3.07%
- Retirement Income: NOT TAXED! (Social Security, pensions, IRAs)
- Local Taxes: Many cities have additional wage taxes
- Tax Year: 2025 (verified November 2025)
Pennsylvania Has a Simple 3.07% Flat Tax
Pennsylvania uses a flat tax system. Everyone pays the same 3.07% rate regardless of income level. This makes PA one of the lowest-tax states in the nation.
Simple Calculation
Pennsylvania State Tax = Your Income × 3.07%
That's it. No brackets, no complicated formulas.
Examples:
- $40,000 × 3.07% = $1,228 PA tax
- $75,000 × 3.07% = $2,302.50 PA tax
- $100,000 × 3.07% = $3,070 PA tax
Real Example: $75,000 Salary in Pennsylvania
Let's say you make $75,000 working in Pennsylvania:
- PA State Tax: $75,000 × 3.07% = $2,302.50
- Effective Rate: 3.07% (simple!)
If you live in Philadelphia:
- PA State Tax: $2,302.50
- Philadelphia City Wage Tax: $75,000 × 3.79% = $2,842.50
- Total: $5,145 (6.86% combined rate)
If you live in Pittsburgh:
- PA State Tax: $2,302.50
- Pittsburgh City Wage Tax: $75,000 × 3% = $2,250
- Total: $4,552.50 (6.07% combined rate)
Philadelphia & Pittsburgh City Wage Taxes
Philadelphia (Largest City)
Philadelphia has a city wage tax:
- Residents: 3.79%
- Non-residents who work in the city: 3.44%
Why so high? Philadelphia uses wage tax revenue to fund city services, schools, and infrastructure.
The Suburban Strategy
Many people live in PA suburbs (Montgomery County, Delaware County, Chester County) to avoid the Philadelphia wage tax while still accessing the city's job market.
Example: $75k earner
- Live in Philadelphia: $5,145 total tax (6.86%)
- Live in suburban Montgomery County: $2,302.50 total tax (3.07%)
- Savings: $2,842.50/year = $28,425 over 10 years!
Trade-off: Longer commute, need a car, but massive tax savings.
Pittsburgh (Second Largest City)
- City wage tax: 3% for all workers (residents and non-residents)
- Combined with state: 6.07% total
Other PA Cities with Local Wage Taxes
Many Pennsylvania municipalities have local earned income taxes:
- Scranton: 3.4%
- Reading: 3.6%
- York: 2%
- Lancaster: 1.5%
- Erie: 1.65%
Important: Check your specific city or borough for exact rates. Most suburban areas have 0.5% to 1% local taxes.
How Does Pennsylvania Compare?
$75,000 Income - Pennsylvania vs Other States
| State/City | Tax Rate | Total Tax | Comparison |
|---|---|---|---|
| Pennsylvania (no city tax) | 3.07% | $2,303 | — |
| Philadelphia, PA | 6.86% | $5,145 | Pay $2,842 more |
| Indiana | 3.0% | $2,250 | Save $53 |
| Arizona | 2.5% | $1,875 | Save $428 |
| New Jersey | Up to 10.75% | ~$3,400 | PA saves $1,097 |
| New York | Up to 10.9% | ~$4,000 | PA saves $1,697 |
| Texas | No income tax | $0 | Save $2,303 |
Tax-Friendly for Retirees
Pennsylvania is one of the most retiree-friendly states for taxes:
What's NOT Taxed in PA
- ✅ Social Security benefits
- ✅ Pension income (public and private)
- ✅ IRA and 401(k) withdrawals
- ✅ Annuity income
- ✅ Military retirement pay
This is HUGE for retirees! Most states tax at least some retirement income.
Example: $60,000 Retirement Income
$30,000 Social Security + $30,000 pension
- Pennsylvania: $0 tax (retirement income exempt)
- New Jersey: ~$1,800 tax
- Connecticut: ~$2,800 tax
Over 20 years: Save $36,000-$56,000 by retiring in PA!
Tax Filing in Pennsylvania
Best Low-Cost Tax Software (2025)
-
Cash App Taxes - FREE for federal and PA state
Completely free, works great for simple 3.07% flat tax. Best deal if you have straightforward W-2 income.
-
FreeTaxUSA - $0 federal, $14.99 PA state
Clean interface, slightly more features than Cash App. Good for rental income or side businesses.
-
TaxSlayer - $24.95 federal, $39.95 for both
More robust for complex situations. Handles local wage taxes automatically.
Skip: TurboTax charges $89+ for the same flat tax calculation.
Finding Affordable Tax Help in Pennsylvania
- VITA (Volunteer Income Tax Assistance): FREE for income under $64,000. Available at libraries and community centers statewide.
- Local Enrolled Agent (EA): $150-$400 for basic return. EAs specialize in tax and cost less than CPAs. Search "enrolled agent near me" + your city.
- Community Tax Centers: Many PA non-profits offer sliding scale fees ($50-$200).
Property Taxes in Pennsylvania
While income tax is low, Pennsylvania has high property taxes in many areas:
- Philadelphia County: ~1.4% of home value
- Allegheny County (Pittsburgh): ~2.0% of home value
- Montgomery County: ~1.5% of home value
- Delaware County: ~1.8% of home value
Example: $250,000 home in suburban Philly
- Property tax: ~$3,750/year
- Income tax savings vs NJ: ~$1,100/year
- Net: Still paying more in property tax than you save on income tax
Key Insight: Factor in total tax burden (income + property) when comparing states.
Should You Move to Pennsylvania?
✅ Pennsylvania is a Great Move If:
- You're retiring with pension/IRA income (zero state tax!)
- You make $60k+ and moving from NJ or NY (save $1,000-$2,000/year on income tax)
- You can live in suburban PA (avoid Philadelphia wage tax)
- You want access to Philly or Pittsburgh job markets without city taxes
- You're okay with cold winters and four seasons
❌ Maybe Think Twice If:
- You'd have to live in Philadelphia proper (6.86% total = higher than many states)
- You're looking at areas with very high property taxes (check specific counties)
- You make under $50k (income tax savings only $200-$500/year)
- You need public transit (PA is car-dependent outside Philly/Pittsburgh)
- You're moving from a no-tax state (you'd be paying MORE)
Best PA Cities for Middle-Class Earners
If you want the low 3.07% tax without city wage taxes, consider these areas:
-
Suburban Philadelphia (avoid city limits)
- King of Prussia, Conshohocken, Wayne, Media
- Only 3.07% state tax (no city tax)
- Access to Philly jobs
- Good schools in many suburbs
-
Harrisburg Area
- State capital, stable government jobs
- Lower cost of living than Philly/Pittsburgh
- Local EIT: ~1% (much lower than Philly's 3.79%)
-
Lehigh Valley (Allentown, Bethlehem, Easton)
- Growing region, affordable housing
- Between Philly and NYC
- Local taxes: 1-1.5%
-
Lancaster County
- Very affordable, family-friendly
- Growing tech/healthcare jobs
- Low local taxes
Common Questions
Will Pennsylvania's 3.07% rate ever change?
Very unlikely. The PA constitution protects the flat tax structure. Any change would require a constitutional amendment, which is politically difficult. The rate has been stable for decades.
If I work in Philadelphia but live in NJ, do I pay both taxes?
Yes, but... You pay PA state tax (3.07%) + Philadelphia wage tax (3.44% for non-residents) + NJ state tax. However, NJ gives you a credit for taxes paid to other states, so you won't be fully double-taxed.
Does PA have sales tax?
Yes. PA sales tax is 6% statewide. Philadelphia adds 2% for a total of 8% in the city. Allegheny County (Pittsburgh) adds 1% for 7% total. Clothing is exempt statewide.
Can I deduct local wage taxes on my federal return?
Yes. You can deduct state + local income taxes on Schedule A if you itemize. However, the SALT deduction is capped at $10,000 total. Many PA homeowners hit this cap with property taxes alone.
The Bottom Line
Pennsylvania offers a simple, low flat tax of 3.07% - one of the lowest in the nation. The tax system is straightforward, and retirement income is completely exempt.
Best for: Retirees (no tax on pensions/Social Security), people moving from high-tax states (NJ, NY), and those who can live in suburban areas to avoid city wage taxes.
Watch out for: Philadelphia's 3.79% city wage tax, high property taxes in many counties, and local earned income taxes that vary by municipality.
Overall verdict: PA is a low-tax state for income, but factor in property taxes and local wage taxes for the full picture.