Pennsylvania Tax Guide
3.07%top marginal rate
Pennsylvania has one of the lowest flat income tax rates at 3.07%. However, many municipalities levy their own earned income taxes, and Philadelphia has its own wage tax. Property taxes are well above the national average. The state has an inheritance tax rather than estate tax.
Pennsylvania Tax at a Glance
Income Tax
3.07%
Flat rate
Sales Tax
6%
State-level rate
Property Tax
1.58%
44% above the national average
Estate Tax
No
No state estate tax
How Pennsylvania Compares to the National Average
Notable Tax Facts
- Flat income tax of 3.07% is one of the lowest in the nation
- Philadelphia wage tax: 3.75% for residents, 3.44% for non-residents — one of the highest local income taxes in the US
- Has an inheritance tax (not estate tax) — rates of 0%, 4.5%, 12%, or 15% depending on relationship
- Property taxes are above the national average at ~1.58%
- Pennsylvania does not tax retirement income for most retirees
Get Glen’s Updates
Investing insights, new tools, and whatever I’m building this week. Free. No spam.
Unsubscribe anytime. I respect your inbox more than Congress respects property rights.
Pennsylvania Tax FAQ
What is Pennsylvania's income tax rate?
Pennsylvania has a flat state income tax rate of 3.07%. However, municipalities levy additional earned income taxes, and Philadelphia charges a wage tax of 3.75% for residents.
Does Pennsylvania have an estate tax?
Pennsylvania has an inheritance tax rather than an estate tax. Rates are 0% for spouses, 4.5% for direct descendants, 12% for siblings, and 15% for all others.
Does Pennsylvania tax retirement income?
Pennsylvania does not tax most common retirement income, including Social Security, 401(k) and IRA distributions (once you reach retirement age), and pension income.
What is the Philadelphia wage tax?
Philadelphia levies a wage tax of 3.75% on residents and 3.44% on non-residents who work in the city. Combined with the state rate, Philadelphia residents can pay nearly 7% in income taxes.
Compare With Other States
Recommended Resources
Tools & books I actually use and recommend
Interactive Brokers
Low commissions, global market access, and professional-grade tools. This is where I hold my positions.
Open an AccountThe Psychology of Money
Morgan Housel on why managing money is about behavior, not intelligence. Short, brilliant chapters you'll re-read.
View on AmazonA Random Walk Down Wall Street
Burton Malkiel's classic case for index investing. The book that convinced millions to stop stock-picking.
View on AmazonSome links above are affiliate links. I only recommend products I personally use. See my full disclosures.
Keep Exploring
Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.