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Paycheck & local tax

Kentucky Paycheck Calculator (2026)

Estimate your take-home pay in Kentucky. The state rate fell to a flat 3.5% in 2026, but local occupational license taxes, 2.2% in Louisville and 2.25% in Lexington, often take nearly as much again.

Kentucky local taxes follow where the work is done. Louisville charges residents more because it adds a school tax.
Some cities inside a county add their own tax on top. Leave at 0 if not.
Gross pay before any deductions.
Filing status
Traditional (pre-tax) contributions.
Per paycheck, through a cafeteria plan.

Your estimated paycheck

$2,101.59Take-home pay · Every two weeks

Gross pay$2,884.62
Retirement contribution−$144.23
Federal income tax−$263.27
Social Security−$178.85
Medicare−$41.83
Kentucky income tax (3.5%)−$91.39
Local occupational tax (2.20%)−$63.46
Take-home pay$2,101.59

Per year: about $54,641 take-home and $16,609 in taxes.

Estimate based on 2026 tax liability spread evenly over the year, using the standard deduction and no credits. Your employer’s withholding can differ.

State tax: 3.5% after Kentucky’s $3,360 standard deduction. Local taxes are figured on gross pay, including 401(k) contributions, for work done in the area.

How this calculator works

The calculator starts with your gross salary and subtracts pre-tax deductions: traditional 401(k) or 403(b) contributions and health premiums paid through a cafeteria plan.

Federal income tax uses the 2026 brackets and standard deduction ($16,100 single, $32,200 married filing jointly). Social Security is 6.2% of wages up to $184,500, and Medicare is 1.45% of all wages plus 0.9% on wages above $200,000. Traditional 401(k) contributions lower income tax but not Social Security or Medicare; cafeteria-plan health premiums lower both.

Kentucky tax is 3.5% of your income after the state’s standard deduction of $3,360. Kentucky starts from your federal adjusted gross income, so 401(k) contributions lower it.

Local occupational license taxes are charged on gross pay for work done inside the city or county, wherever you live. They are figured before 401(k) contributions, so saving for retirement doesn’t reduce them.

Louisville Metro charges 2.2% to people who live and work in Jefferson County (1.25% for Metro, 0.75% for schools and 0.2% for TARC transit) and 1.45% to commuters, who don’t pay the school portion. Lexington-Fayette charges 2.25% to everyone who works in Fayette County.

Some cities inside a county add their own tax on the same wages. Use the extra-tax field for these, and the “another city or county” option for anywhere else in Kentucky.

Worked example

Single, lives and works in Louisville, $75,000 salary, paid every two weeks, 5% to a 401(k)

  1. After the $3,750 401(k) contribution, federal adjusted gross income is $71,250. Federal tax, Social Security and Medicare come to about $12,583.
  2. Kentucky tax: ($71,250 − $3,360) × 3.5% = $2,376.15.
  3. Louisville occupational tax: 2.2% of the full $75,000 = $1,650. A commuter living outside Jefferson County would pay 1.45%, or $1,087.50.
  4. Take-home pay is about $54,641 a year, or $2,101.59 per paycheck.

Questions people ask

What is the Kentucky income tax rate for 2026?

A flat 3.5%, down from 4% in 2025. Kentucky has been lowering the rate in steps since 2022 under a law that allows cuts when state revenue meets set targets.

Do I pay Louisville tax if I live in Indiana?

Yes, on pay for work done in Louisville Metro, at the 1.45% nonresident rate. Indiana residents generally don’t pay Kentucky state income tax on wages because of a reciprocal agreement, but local occupational taxes are not covered by it.

Does working from home change my local tax?

It can. Occupational taxes apply to work performed in the jurisdiction, so days worked from home in a different city or county may not be taxable there. Ask your employer how they allocate remote days.

Why doesn’t my 401(k) lower my local tax?

Kentucky local occupational taxes are charged on gross compensation, which includes your own 401(k) contributions. Lexington also includes contributions to cafeteria plans. The state income tax, by contrast, starts after those deductions.

Sources

Last reviewed October 2, 2026