Louisville Occupational Tax Calculator 2026 โ 2.2% City Tax
Calculate Louisville's 2.2% occupational tax plus Kentucky state tax (3.5%) and federal income tax. See total take-home pay and compare Louisville vs Lexington vs other KY cities.
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Net Take-Home Pay
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Louisville Occupational Tax (2.2%)
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Kentucky State Tax (3.5%)
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Federal Income Tax
Full Tax Breakdown
How Louisville's Occupational Tax Works
Louisville/Jefferson County Metro imposes a 2.2% occupational license tax on all wages, salaries, commissions, and net business profits earned within the metro area. This is in addition to Kentucky's flat 3.5% state income tax and federal income taxes.
Unlike some city taxes, there is no minimum income threshold โ even part-time workers and temporary employees owe the tax on Louisville-earned income. Non-residents working in Louisville also owe the full 2.2% on their Louisville wages.
The Tax Formula
Louisville Occ. Tax = Gross Income x 2.2%
KY State Tax = (Gross Income - $3,160 deduction) x 3.5%
Federal Tax = standard bracket calculation (deduction: $16,100 single / $32,200 MFJ)
Net Pay = Gross Income - Louisville Tax - KY Tax - Federal Tax
KY State Tax = (Gross Income - $3,160 deduction) x 3.5%
Federal Tax = standard bracket calculation (deduction: $16,100 single / $32,200 MFJ)
Net Pay = Gross Income - Louisville Tax - KY Tax - Federal Tax
Example
Jennifer earns $75,000 working in Louisville (single filer):
Louisville occ. tax: $75,000 x 2.2% = $1,650
KY state tax: ($75,000 - $3,160) x 3.5% = $71,840 x 3.5% = $2,514
Federal tax (standard deduction $16,100): ~$10,294
Total taxes: $14,458 | Net pay: $60,542
Louisville occ. tax: $75,000 x 2.2% = $1,650
KY state tax: ($75,000 - $3,160) x 3.5% = $71,840 x 3.5% = $2,514
Federal tax (standard deduction $16,100): ~$10,294
Total taxes: $14,458 | Net pay: $60,542
Extended
Louisville vs Kentucky Cities Tax Comparison
Compare occupational tax rates across major Kentucky cities plus total tax burden analysis
Kentucky Cities Occupational Tax Comparison
| City | Occ. Tax Rate | Tax on $75,000 | Tax on $100,000 |
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Total Tax Burden Comparison at Your Income
| City | City Tax | KY State Tax | Federal Tax | Net Pay |
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Frequently Asked Questions
What is the Louisville occupational tax rate in 2026?
Louisville/Jefferson County Metro charges 2.2% on wages, salaries, commissions, and net business profits. This applies to all workers who earn income within the Louisville Metro area, including non-residents who work there. There is no income exemption or deduction โ the tax applies to all compensation earned in Louisville.
Do non-residents of Louisville pay the occupational tax?
Yes. The Louisville occupational tax applies to all wages and salaries earned within Louisville Metro, regardless of where you live. If you live in Indiana or another Kentucky city but work in Louisville, you owe the 2.2% tax on wages earned in Louisville. You may receive a credit in your home jurisdiction for taxes paid to Louisville โ check with your home city or state.
How does Kentucky state income tax work in 2026?
Kentucky has a flat 3.5% income tax rate for 2026, reduced from 4% in 2024 and 4.5% in 2023. The state standard deduction is $3,160 for all filers. Kentucky does not have local income taxes at the state level, but most cities and counties impose occupational taxes like Louisville's 2.2%.
Is Louisville's occupational tax deductible on federal taxes?
Yes. State and local income taxes paid to Louisville (and Kentucky) are deductible on Schedule A if you itemize federal deductions. However, the SALT (State and Local Tax) deduction is capped at $10,000 per year ($5,000 if married filing separately) under TCJA rules through 2025. In 2026, the SALT cap was extended. For most workers, the total of KY state tax + Louisville occupational tax will be well under the $10,000 cap.
What other Kentucky cities have occupational taxes?
Most Kentucky cities impose occupational taxes. Lexington (Fayette County) charges 2.25%, slightly higher than Louisville. Bowling Green charges 1.85%, Owensboro 1.33%, Covington 2.45%, Newport 2.2%, Paducah 2.0%, Richmond 2.0%, and many smaller cities have rates from 0.5% to 2.5%. The Kentucky Department of Revenue provides a complete list of city occupational tax rates.