The Local Income Tax Your Paycheck Calculator Forgot: What Cities and Counties Actually Take in 2026

You ran your salary through an online paycheck calculator, it showed federal tax, Social Security, Medicare, and your state income tax, and the number looked reasonable. Then your first real paycheck in a new city came in smaller than the estimate. The reason is usually sitting one layer below the state line: a local income tax that the calculator never modeled. Seventeen states plus Washington D.C. let cities, counties, or school districts tax your wages, withheld separately from state tax. Most online calculators stop at federal plus state. Here is what those local taxes actually look like in 2026, who pays them, and why a 2.5% local rate is not always equal to another 2.5%.

Seventeen States Plus D.C. Allow a Local Wage Tax

Across 17 states plus Washington D.C., a city, county, or locality can levy its own income tax on top of the state tax. These are withheld separately from your state income tax, usually on a distinct line of your pay stub, and they fund municipal services, schools, or transit. The rates range from a fraction of a percent to nearly 4%, and the rules for who pays and what income is taxed vary wildly from one state to the next. The common thread is that a generic calculator built around federal and state brackets will quietly miss them.

Ohio: 700-Plus Municipalities, Mostly on Gross Wages

Ohio is the densest local-tax state in the country, with more than 700 municipalitiescharging a local income tax. Columbus, Cleveland, Toledo, and Akron each charge 2.5%, Cincinnati charges 1.8%, and Parma charges 3%. Crucially, most Ohio city taxes apply to gross wages with few deductions, and many cities tax income earned inside the city regardless of where you live, usually offering a credit against your home city’s tax so you are not double-charged. If you live in one Ohio city and work in another, both localities can be involved on the same paycheck.

Pennsylvania: Philadelphia’s 3.75% Is the Heaviest

Philadelphia runs the highest local wage tax in the country: 3.75% for residents and 3.44% for non-residents who work in the city. On a $75,000 salary, the resident share is about $2,812 a year, or roughly $108 per biweekly paycheck. That is real money that a federal-plus-state calculator will never surface. Many other Pennsylvania municipalities and school districts also levy an earned-income tax, typically 1% to 2%, so Philadelphia is the ceiling, not the whole story.

New York City: Residents Only, Graduated

New York City charges a graduated local income tax from 3.078% up to 3.876%, but it applies to residents only, not commuters who work in the city and live elsewhere. The base is NYC taxable income, meaning it rides on top of the state tax base rather than gross wages, so deductions that shrink your state taxable income also shrink the city tax. Yonkers adds a separate surcharge of its own. A commuter from New Jersey or Connecticut pays no NYC local tax, which is a common point of confusion.

Maryland: Every County, Riding on State Taxable Income

Maryland is unusual because every county plus Baltimore City levies a local income tax, with rates ranging from 2.25% to 3.20%. Howard County sits at the top at 3.20%. Unlike Ohio’s gross-wage taxes, Maryland’s local tax rides on Maryland taxable income, so it is calculated after state deductions and exemptions rather than on raw wages. That makes a 3.20% Maryland rate less punishing than a 3% Ohio rate on the same salary, because the base is smaller.

Michigan: 24 Cities, Detroit Leading

Michigan authorizes local income taxes in 24 cities. Detroit charges 2.4% for residents and 1.2% for non-residents who work in the city. Grand Rapids and Saginaw charge 1.5% for residents and 0.75% for non-residents. The remaining 20 cities generally charge 1% for residents and 0.5% for non-residents. Like Ohio, Michigan local taxes apply to gross wages with few deductions, so the resident rate bites directly on the top of your paycheck.

Indiana: Counties Instead of Cities

Indiana has no city income tax, but all 92 counties levy a county income tax between 0.5% and 3.38%. Marion County, home to Indianapolis, charges 2.02%. The county tax applies to adjusted gross income and is withheld alongside state tax, so an Indiana worker almost always has a local layer even though no city is involved.

Kentucky: Occupational License Fees

Kentucky frames its local taxes as occupational license fees, but the effect on your paycheck is the same. Louisville charges 2.2% and Lexington-Fayette charges 2.25%. The median across the state is about 1%, with a range from 0.50% to 2.5%. Like Ohio and Michigan, these generally apply to gross wages.

Who Pays, and What Base, Changes Everything

Two questions separate a small nuisance from a real cost. First, who pays: New York City taxes residents only, while many Ohio cities tax income earned in the city regardless of residence, usually with a credit for your home city. That means a worker should check both their home locality and their work locality, because either or both can have a claim. Second, what base the tax applies to: Ohio, Kentucky, and Michigan local taxes apply to gross wages with few deductions, while Maryland’s rides on Maryland taxable income and NYC’s on NYC taxable income. A 2.5% gross-wage tax bites harder than a 2.5% taxable-income tax, because the gross base is larger and deductions do not soften it.

What It Costs on a $75,000 Salary

The table below shows the approximate annual local income tax on a $75,000 salary in six high-rate localities. These are rough figures for comparison; your actual cost depends on deductions, residency, and filing status.

Philadelphia’s $2,812 works out to about $108 per biweekly paycheck, which is why a calculator that ignores local tax can leave a worker quietly short every two weeks. Howard County’s $2,400 looks comparable on paper but applies to taxable income, so the real gap between the two is wider than the headline rates suggest.

The Bottom Line

Local income taxes are a real and often overlooked layer in 17 states plus D.C., and they can take anywhere from a few hundred to nearly three thousand dollars a year out of a $75,000 salary. Our state paycheck calculators model federal income tax, FICA, and state income tax, so where a local tax applies, it must be subtracted on top of what the calculator shows. Check both your home locality and your work locality, note whether the tax sits on gross wages or taxable income, and you will have a far more honest estimate of what actually lands in your bank account.