Kentucky Paycheck Calculator

Five lines can come out of a Kentucky paycheck: federal income tax, Social Security (6.2% up to $184,500), Medicare (1.45%), Kentucky state income tax, and a local occupational license tax where the city or county you work in levies one. Kentucky has no employee-paid disability or paid-leave premium, so anything else on your stub is your own election: 401(k), health premiums, HSA, and similar benefits.

The state formula is one line: annual wages minus the $3,360 standard deduction, times 3.5%, divided by your number of pay periods. There are no allowances, no per-dependent amounts, and no separate schedule for married or head-of-household filers, so two people on the same salary get the same Kentucky withholding. Bonuses are effectively withheld at the same 3.5%. Lowering the state line comes down to pre-tax deductions such as a 401(k), which reduce the wages the formula starts from.

Occupational license taxes are set by work location and charged on gross wages; residency changes the rate in some places. Louisville Metro takes 1.25% plus a 0.20% TARC transit levy from all workers, and residents pay a further 0.75% school tax: 2.2% for residents, 1.45% for nonresidents. Lexington's occupational license fee is 2.25%. Elsewhere, rates of 0.5% to 2.5% are common. Type your work location's rate into the Kentucky local occupational tax field, or leave 0 if none applies; the calculator applies it to gross wages less Section 125 benefits.

House Bill 1 cut the flat rate from 4.0% to 3.5% for tax years beginning January 1, 2026, and the standard deduction rose from $3,270 to $3,360. The revenue triggers that could have brought further cuts in 2027 and 2028 were missed, so 3.5% continues. Residents of Illinois, Indiana, Michigan, West Virginia, and Wisconsin who work in Kentucky claim exemption from state withholding on Form K-4, as do Virginia daily commuters and Ohio residents other than 20%-plus S corporation owners; local occupational taxes still apply.