What is the Kentucky state income tax rate?

Kentucky uses a single flat income tax rate that applies to all taxable income, replacing the old graduated brackets. The rate has been stepping down under recent reforms — around 4.0% in 2025 and 3.5% in 2026 — and is applied after a standard deduction. This tool lets you set the current rate.

Does Kentucky have local income taxes?

Yes. Many Kentucky cities and counties levy a local occupational (payroll) tax on wages earned within their boundaries. Louisville Metro, Lexington-Fayette, and others charge a percentage of gross wages. These are separate from and on top of the state flat tax.

What is taken out of a Kentucky paycheck?

A Kentucky paycheck has the state flat income tax, any local occupational tax, FICA (6.2% Social Security up to the wage base plus 1.45% Medicare), and federal income tax withheld. Together these usually remove 20 to 30 percent of gross pay.

Is the local occupational tax on gross or net pay?

Local occupational taxes in Kentucky are generally levied on gross wages, with no standard deduction, and are often not capped except where a wage cap applies for the Social Security base. That is why even a 2 to 2.2 percent local rate adds up meaningfully over a year.

How accurate is this estimate?

It is a close planning estimate. Your actual withholding depends on pre-tax 401(k) and insurance deductions, additional federal allowances, exact local rules, and rounding in official tables. Use your pay stub and the Kentucky Department of Revenue figures for precise numbers.

Kentucky Paycheck Calculator

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Kentucky take-home pay

Kentucky taxes wages with a single flat income tax rate, applied after a standard deduction, rather than graduated brackets. On top of that, many Kentucky localities — Louisville Metro, Lexington-Fayette, and others — charge a local occupational tax on gross wages. This calculator combines the state flat tax, your local rate, FICA, and federal income tax to estimate what actually reaches your bank account.

How it works

FICA        = min(gross, $176,100) x 6.2%  +  gross x 1.45%
kentucky    = (gross - KY standard deduction) x flat rate
local tax   = gross x local occupational rate
federal     = brackets applied to (gross - federal standard deduction)
net annual  = gross - FICA - kentucky - local - federal
per paycheck = net annual / pay periods

Kentucky’s flat rate (about 4.0% in 2025, 3.5% in 2026) applies to nearly all income above the standard deduction. The local occupational tax is charged on gross wages with no deduction, which is why a 2.2% local rate still bites.

Example and notes

On a $60,000 salary in Louisville (local rate around 2.2%), FICA takes about $4,590, Kentucky flat tax roughly $2,300, local tax about $1,320, and federal income tax several thousand more — landing take-home near $46,000–$47,000.

This is a planning estimate. Pre-tax retirement and health contributions, extra allowances, and exact local rules change the result. Set the flat rate to the current year and confirm your local occupational rate with your city or county, plus the Kentucky Department of Revenue tables, for precise figures.