Kentucky Paycheck Calculator
Free Kentucky paycheck calculator. Estimate your take-home pay with current Kentucky state tax rates and federal withholdings. Calculate federal income tax, Social Security, Medicare, and Kentucky state withholdings instantly.
What you should know about Kentucky taxes
Kentucky has a flat 4% state rate — recently reduced from 5%. But many Kentucky cities and counties charge occupational taxes of 1–2.5%, which can significantly increase your total tax burden.
Kentucky Income Tax Brackets — 2026
| Tax Rate | Taxable Income Range |
|---|---|
| 4% | All taxable income (flat rate) |
Kentucky's 4% Flat Tax Plus Local Taxes
Kentucky dropped its flat rate from 5% to 4% in 2024 as part of a phased reduction. The state plans to continue lowering the rate — possibly eliminating state income tax entirely if revenue targets are met. The catch is local occupational taxes. Louisville/Jefferson County charges 2.2% on wages, Lexington/Fayette County charges 2.25%, and many smaller towns charge 1–1.5%. These are mandatory payroll deductions that your employer withholds automatically. For a Louisville worker, the combined state (4%) plus local (2.2%) rate is 6.2% — higher than the pre-cut state rate alone.
Louisville and Lexington Occupational Taxes
If you work or live in Louisville, you pay a 2.2% occupational tax on all earned income. Lexington charges 2.25%. These apply to where you work, not where you live. If you work in Louisville but live in a county without a local tax, you still pay Louisville's 2.2%. Some counties have a reciprocity arrangement that credits one against the other. Kentucky is also a "right-to-work" state, meaning union dues are not required even in unionized workplaces. Manufacturing (Ford, Toyota, GE Appliances) and healthcare (Humana, Baptist Health) are the largest private employers, both concentrated in the Louisville and Lexington corridors.