How this calculator works
Every municipality and school district in Pennsylvania (except Philadelphia) has a combined resident earned income tax rate. Many also set a non-resident rate for people who work there.
Under Pennsylvania’s Act 32 rules, your employer withholds at the higher of your resident rate and your work location’s non-resident rate. The calculator compares the two and applies the higher one.
The Local Services Tax is a flat yearly charge of up to $52 in many municipalities, usually taken in small amounts from each paycheck. Enter the amount for your work location.
Earned income tax applies to Pennsylvania taxable compensation, which includes 401(k) contributions.
Worked example
$65,000 wages, resident rate 1.5%, work location non-resident rate 1.0%, $52 LST
- Your resident rate (1.5%) is higher than the non-resident rate (1.0%), so 1.5% is withheld.
- Earned income tax: 1.5% of $65,000 = $975.
- Adding the $52 Local Services Tax gives $1,027 a year, about $39.50 per biweekly paycheck.
Questions people ask
What is a PSD code?
A PSD code is a six-digit number that identifies your municipality and school district for local tax. Employers use it to apply the right rate, and it appears on the residency certification form you give your employer.
Why do I pay my home rate if I work somewhere else?
Pennsylvania withholds at the higher of the two rates, and the tax ultimately goes to your home municipality. If your work location’s non-resident rate is higher, that rate is withheld and the work location keeps the difference.
Does Philadelphia use this system?
No. Philadelphia has its own wage tax and is not part of the Act 32 earned income tax system. Use our Philadelphia wage tax calculator instead.
Can I get the Local Services Tax back?
Many municipalities exempt people who earn less than $12,000 a year from all sources. If you qualify, you can file an exemption certificate with your employer or request a refund.
Sources
Last reviewed October 1, 2026