Kentucky rules
How Kentucky taxes your paycheck in 2026
Kentucky moved to a flat income tax in 2018 and has been lowering it ever since, reaching 3.5% for 2026. The Kentucky Department of Revenue applies this single rate after a state standard deduction of about $3,400, keeping the system simple and the rate among the lower flat rates nationally.
The 3.5% flat rate
Every dollar of Kentucky taxable income is taxed at 3.5%. The state standard deduction (around $3,400 for 2026) is subtracted first. Because Kentucky's deduction is modest, your effective state rate stays close to 3.5% across most salaries.
| Gross salary | KY state tax (≈3.5%) | Est. take-home |
|---|---|---|
| $45,000 | ~$1,456 | ~$37,200 |
| $55,000 | ~$1,806 | ~$43,900 |
| $90,000 | ~$3,031 | ~$68,700 |
| $130,000 | ~$4,431 | ~$95,900 |
After the $3,400 standard deduction. Single filer, 2026 federal brackets and FICA.
Comparing Kentucky to other states
Kentucky's 3.5% sits just below North Carolina and above Indiana's 3.0%. Compare with neighboring Ohio or Tennessee, which has no income tax at all.
Questions
Kentucky salary calculator FAQ
What is the Kentucky income tax rate for 2026?
Kentucky has a flat individual income tax of 3.5% for 2026, administered by the Kentucky Department of Revenue, applied after a state standard deduction of about $3,400. The rate has been cut steadily from 5% since 2018.
How much is taken out of a paycheck in Kentucky?
A Kentucky paycheck is reduced by federal income tax, 6.2% Social Security, 1.45% Medicare and the flat 3.5% state income tax, plus any local occupational tax. On a $55,000 single salary, the state and federal deductions total roughly 21% to 23%.
Does Kentucky have local payroll taxes?
Yes. Many Kentucky cities and counties levy a local occupational license tax on wages, often between 0.5% and 2.5% — both Louisville and Lexington do. This is separate from the 3.5% state rate shown in the calculator.
What is the take-home pay on $55,000 in Kentucky?
A single filer earning $55,000 in Kentucky takes home roughly $43,900 a year after federal tax, FICA and the 3.5% state income tax, before any local occupational tax. Use the calculator for your exact figure.
- Sources: Kentucky Department of Revenue (2026 flat 3.5%; standard deduction) · IRS Rev. Proc. 2025-32 · SSA 2026 wage base.
- 🔄 Last updated June 9, 2026 · Tax year 2026
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