Does Louisville really have its own income tax?

Yes. Louisville Metro levies an occupational license fee on wages earned within the metro, which functions like a flat local income tax. It is separate from and stacks on top of Kentucky's state income tax.

What is the Louisville occupational tax rate?

The Louisville Metro occupational license fee is 1.45% on wages, plus a 0.20% Mass Transit Trust Fund (TARC) levy, for a combined 1.65% on most wage earners. Some adjoining school-board fees may also apply.

Do non-residents pay the Louisville occupational tax?

Yes. The fee is based on where the work is performed, not where you live, so commuters who earn wages inside Louisville Metro owe the same wage rate as residents.

Is there a wage cap on this tax?

The Louisville Metro wage portion has no income ceiling and applies to all gross wages. This differs from some states' caps, so high earners pay the flat percentage on their full wage base.

Does this replace my Kentucky state tax?

No. Kentucky charges a separate flat state income tax of about 4% on taxable income. The Louisville occupational fee is in addition to state and federal income tax, not a substitute.

Louisville City Income Tax Calculator

What this calculator does

Louisville Metro funds local services through an occupational license fee — a flat local income tax assessed on wages earned anywhere inside the metro. This is a layer that sits on top of Kentucky’s flat state income tax and your federal obligations. This tool computes the Louisville-specific portion so you can see exactly how much of your paycheck goes to the city.

How it works

The Louisville Metro occupational fee is a flat percentage of gross wages with no income cap:

metro_fee   = wages * 0.0145   (1.45% Louisville Metro)
transit_fee = wages * 0.0020   (0.20% Mass Transit Trust / TARC)
total_local = wages * 0.0165   (combined 1.65%)

Because the fee is sourced to where the work is performed, residents and non-resident commuters pay the same wage rate. There is no standard deduction or personal exemption applied to the occupational fee — it is gross-wage based. The calculator also shows an estimate of Kentucky’s flat state income tax (about 4%) for context, but the local fee is what makes Louisville distinct.

Example and notes

For wages = 60,000: the Louisville Metro portion is 60,000 * 0.0145 = 870, the transit portion is 60,000 * 0.0020 = 120, for a combined local tax of 990. That 990 is owed regardless of where you live, as long as the work happened in Louisville Metro. Self-employed net profits earned in the metro are also subject to the occupational fee under separate filing rules. Always confirm the current published rates with Louisville Metro Revenue Commission before filing.