Pennsylvania has a flat 3.07% state income tax on all taxable income, making it one of the simplest tax systems in America. Whether you earn $40,000 or $400,000, you pay the same 3.07% rate. Philadelphia exception: Philadelphia residents pay an additional 3.74% local wage tax, bringing the combined rate on wages to 6.81%.
Why a flat tax? Pennsylvania's personal income tax is levied at a single flat rate, currently 3.07%. Flat taxes are praised for simplicity but criticized for being less progressive than bracket systems.
How it compares:
Retirement advantages: PA doesn't tax Social Security or military pensions, or 401(k) and IRA distributions taken after reaching retirement age (early withdrawals can be taxable). This makes PA moderately attractive to retirees despite property taxes.
Source: Pennsylvania Department of Revenue - Personal Income Tax Guide
Here's what Pennsylvania residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $1,535 | $5,355 | $44,645 | 10.7% |
| $75,000 | $7,670 | $2,303 | $9,973 | $65,027 | 13.3% |
| $100,000 | $13,170 | $3,070 | $16,240 | $83,760 | 16.2% |
| $150,000 | $24,734 | $4,605 | $29,339 | $120,661 | 19.6% |
| $250,000 | $51,304 | $7,675 | $58,979 | $191,021 | 23.6% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, Pennsylvania takes $3,070 in state tax alone.
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Migration Trends: According to U.S. Census Bureau data (2021-2022), Pennsylvania experienced net outmigration of 42,567 residents. Top destination states were:
Incoming migration: Pennsylvania gained residents from:
Why people move to Pennsylvania:
Why people leave Pennsylvania:
Tax considerations if moving here:
| State | Tax Rate | Tax on $100K Income | Difference from Pennsylvania |
|---|---|---|---|
| Pennsylvania | 3.07% flat | $3,070 | Baseline |
| New York | 3.9-10.9% | $4,860 | +$1,790 (more tax) |
| New Jersey | 1.4-10.75% | $4,180 | +$1,110 (more tax) |
| Ohio | 0-2.75% | About $1,980 (est.) | About −$1,090 (est.) |
Key insight: Pennsylvania saves residents $1,110-$1,790/year at $100K income compared to NJ and NY. Moving from PA to Florida or Texas saves the full $3,070/year state tax. Ohio's estimated 2026 tax is roughly $1,090 lower at $100K (Ohio's 2026 figures are not yet confirmed from official sources).
Philadelphia residents: full picture
Property tax comparison:
Bottom line: PA's flat 3.07% is lower than the NY and NJ state income tax for high earners. A $200K earner saves $5,188/year vs NY, $4,410/year vs NJ. However, Philadelphia's 3.74% local tax reduces the advantage. PA suburbs outside Philadelphia avoid the city wage tax but still typically carry a local earned income tax of about 1%.
Pennsylvania has a flat 3.07% state income tax on all income, regardless of how much you earn. This means a $50K earner and a $500K earner both pay 3.07%. Philadelphia residents pay an additional 3.74% local wage tax on top of state tax, bringing total to 6.81%. Outside Philadelphia, most PA municipalities and school districts also levy a local earned income tax, commonly about 1% combined (rates vary by location; see the PA Department of Community and Economic Development, Act 32).
PA's flat 3.07% is simpler but less progressive than neighboring states. At $100K: PA charges $3,070 vs NY $4,860 (PA saves $1,790) vs NJ $4,180 (PA saves $1,110). At $150K: PA charges $4,605 vs NY $8,291 (PA saves $3,686). High earners benefit most from PA's flat tax since the gap widens with income.
Pennsylvania is moderately retirement-friendly. No state tax on: Social Security benefits, military pensions, or (after retirement age) private pensions, 401(k) withdrawals, IRA distributions, or annuity income; early withdrawals can be taxable. However, property taxes are moderately high (1.26% average) and there's an inheritance tax (4.5-15% depending on relationship). Better than NY/NJ for retirees, but not as good as FL/TX (zero income tax).
Yes, but at a lower rate. Philadelphia residents pay a 3.74% wage tax (3.735% from July 1, 2026). Non-residents who work in Philadelphia pay 3.43% (3.425% from July 1, 2026). If you live in PA suburbs and commute to Philly, you pay about 3.43% city tax + 3.07% state = 6.50% total, plus any local earned income tax levied where you live.
Move if: you're a high earner ($150K+) who can work remotely or find jobs in PA, want lower costs than NYC/NJ metro, and don't mind cold winters. Save $1,790/year vs NY at $100K, $1,110/year vs NJ at $100K — savings grow significantly at higher incomes. Consider PA suburbs (not Philly) for lowest taxes. Stay in NY/NJ if: you need NYC job access (PA has fewer high-paying jobs), rely on public transit (PA is car-dependent outside Philly), or value NYC culture/walkability.
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How we calculate: Pennsylvania's flat 3.07% tax makes calculations simple: take your taxable income and multiply by 0.0307. Our calculator uses this flat rate on all income, with no standard deduction or personal exemption at the state level (PA doesn't allow itemized deductions). For Philadelphia residents, we add 3.74% local wage tax. Federal tax uses standard 2026 IRS brackets.
Data sources:
Verification: Pennsylvania's 3.07% flat tax rate verified against PA Department of Revenue official publications on March 17, 2026. Philadelphia wage tax rates verified against City of Philadelphia Department of Revenue.
Limitations: Assumes single filer, W-2 wage income only, non-Philadelphia resident (unless stated otherwise). Does not include: federal deductions/credits, Philadelphia wage tax (unless explicitly noted), local earned income taxes outside Philadelphia (commonly about 1%), local school district taxes (vary by municipality, typically paid via property tax), inheritance tax implications. Retirement income calculations assume eligible pension/401k income (PA doesn't tax these).
For complex situations: Consult a licensed PA CPA or tax professional, especially for: Philadelphia residency vs. non-resident wage tax questions, inheritance tax planning (4.5-15% depending on relationship), multi-state income allocation.
Last Updated: October 2026
Verified By: Daniel · CountryTaxCalc
Contact: For corrections or questions, visit our contact page.
Last Updated: October 2026