Kentucky paycheck taxes at a glance
| State income tax | Flat 3.5% |
|---|---|
| Standard deduction | $3,360 for every filer |
| Pre-tax deductions | 401(k), HSA and health premiums lower state tax too |
| Local income tax | Yes: 4 options in the calculator |
| State payroll deductions | None |
| Reciprocity | With IL, IN, MI, OH, VA, WV, WI |
| Figures | Tax year 2026 |
Every paycheck also has federal income tax, Social Security (6.2% up to $184,500) and Medicare (1.45%), worked out with the same 2026 IRS figures as ourmain paycheck calculator.
Worked examples
A $55,000 salary in Louisville, single, living in Jefferson County
| Per paycheck | Per year | |
|---|---|---|
| Gross pay | $2,115.38 | $55,000 |
| Federal income tax | − $170.00 | − $4,420 |
| Social Security and Medicare | − $161.83 | − $4,208 |
| Kentucky income tax | − $69.52 | − $1,807 |
| Local: Louisville Metro (live and work in Jefferson County) | − $46.54 | − $1,210 |
| Take-home pay | $1,667.50 | $43,355 |
Single, paid every two weeks (26 paychecks). Kentucky taxable income is $51,640 and the state tax is $1,807, an effective 3.286% of gross pay. The 2.2% Louisville occupational tax applies to the full salary, while the 3.5% state rate applies only after the $3,360 standard deduction.
A $95,000 household in Lexington, married filing jointly with two children
| Per paycheck | Per year | |
|---|---|---|
| Gross pay | $3,653.85 | $95,000 |
| 401(k) at 5% | − $182.69 | − $4,750 |
| Federal income tax | − $79.62 | − $2,070 |
| Social Security and Medicare | − $279.52 | − $7,268 |
| Kentucky income tax | − $116.97 | − $3,041 |
| Local: Lexington-Fayette County | − $100.48 | − $2,613 |
| Take-home pay | $2,894.57 | $75,259 |
Married filing jointly, 2 children, paid every two weeks (26 paychecks). Kentucky taxable income is $86,890 and the state tax is $3,041, an effective 3.201% of gross pay. The 401(k) deferral lowers Kentucky taxable wages but not the 2.75% Lexington-Fayette local tax, and Kentucky gives no deduction for children.
Local occupational license taxes
Kentucky localities tax wages where you work, and your employer withholds the tax. In Louisville Metro (all of Jefferson County) the rate is 2.2% if you also live there and 1.45% if you live elsewhere, because non-residents skip the 0.75% school board share. In Lexington-Fayette it is the 2.25% urban county fee plus the 0.5% Fayette County schools tax. Many other cities, counties and school districts levy their own rates, so use the custom option and enter the combined rate on your pay stub. The local tax applies to gross wages; 401(k) deferrals do not reduce it.
Rate cut to 3.5% for 2026
Kentucky taxes all income at one flat rate. It was 4% in 2025 and is 3.5% for 2026, the rate in the Department of Revenue’s 2026 withholding formula. The standard deduction is indexed for inflation each year and rose by $90 to $3,360. Kentucky has no personal or dependent exemptions; low-income families may qualify for the family size tax credit instead.
Reciprocity with seven states
Kentucky has reciprocal agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia and Wisconsin. If you live in one of them and work in Kentucky, you can ask your employer to withhold your home state’s tax instead. Local occupational taxes still apply where you work.
Two jobs and married couples
The standard deduction can be claimed only once per person, but each employer’s withholding formula subtracts it. The Department of Revenue says workers with more than one employer may need to ask for an extra $117.60 a year to be withheld. Married couples who both work can file separately on a combined return so that each spouse claims a $3,360 deduction; this calculator applies one deduction to the household salary.
Kentucky vs. neighboring states
Take-home pay on a $75,000 salary, single, no pre-tax deductions and no local tax:
| State | Income tax | State tax + programs | Take-home |
|---|---|---|---|
| Kentucky | Flat 3.5% | $2,507 | $59,085 |
| Illinois | Flat 4.95% | $3,568 | $58,025 |
| Indiana | Flat 2.95% | $2,183 | $59,410 |
| Ohio | 2.75% above $26,050 (single) | $1,619 | $59,974 |
| West Virginia | 2.11% to 4.58% (5 brackets) | $2,546 | $59,047 |
| Virginia | 2% to 5.75% (4 brackets) | $3,498 | $58,094 |
| Tennessee | None on wages | $0 | $61,593 |
| Missouri | 2% to 4.7% (8 brackets, 0% up to $1,348 single) | $2,534 | $59,059 |
Where you work and where you live can both matter. See paycheck calculators for every state for the full comparison.