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Tax Year 2026Updated July 21, 2026

Kentucky Paycheck Calculator 2026

Kentucky uses a flat income tax rate of 3.50% on all taxable income. Unlike states with graduated brackets, every dollar you earn above the exemption threshold is taxed at the same rate. Combined with federal income tax and FICA deductions, use the calculator below to see your actual take-home pay per pay period.

Kentucky's Flat Income Tax

Kentucky levies a flat 3.50% income tax on all taxable income. There are no progressive brackets - whether you earn $30,000 or $300,000, the state rate is the same. This simplifies withholding calculations compared to graduated-bracket states.

Retirees may benefit from partial pension income exclusions.

How Your Kentucky Paycheck Is Calculated

  1. Gross pay: Your annual salary divided by the number of pay periods.
  2. Federal income tax: 2026 progressive brackets (10%-37%) after the federal standard deduction of $16,100 (single) or $32,200 (MFJ).
  3. Social Security: 6.2% on wages up to $184,500.
  4. Medicare: 1.45% on all wages, plus 0.9% above $200,000 (single).
  5. Kentucky state income tax: Flat 3.50% on taxable income.

Kentucky Standard Deduction

Kentucky's standard deduction for 2026 is $3,360 for single filers and $3,360 for married filing jointly. This is subtracted from gross income before Kentucky's tax brackets are applied. Note: the state deduction is separate from and much smaller than the federal standard deduction of $16,100.

Retirement Income in Kentucky

Kentucky offers a partial exclusion for pension and retirement income. Some retirement income may be exempt or receive preferential treatment depending on the source and amount. Kentucky excludes certain qualified retirement income (primarily pre-1998 government pension income via Schedule P) from taxation. Social Security benefits are fully exempt. The exclusion amount for Schedule P pensions is approximately $31,110 (verify the exact 2026 figure from KY DOR). Private pensions and other retirement income above the exclusion amount are taxed at the flat 3.5% rate.

Worked Examples

Example 1: $48,000/year - Married Filing Jointly, Biweekly

Profile: $48,000 annual salary, Married Filing Jointly filer, paid biweekly (26 paychecks/year)

Gross per period: $1,846.15
Federal income tax: -$60.77
Social Security: -$114.46
Medicare: -$26.77
Kentucky state income tax: -$64.62
Net take-home pay: $1,579.53 per paycheck ($41,068/year)
Effective total tax rate: 14.44%

Example 2: $135,000/year - Head of Household, Semi-monthly

Profile: $135,000 annual salary, Head of Household filer, paid semimonthly (24 paychecks/year)

Gross per period: $5,625.00
Federal income tax: -$724.63
Social Security: -$348.75
Medicare: -$81.56
Kentucky state income tax: -$196.88
Net take-home pay: $4,273.18 per paycheck ($102,556/year)
Effective total tax rate: 24.03%

Example 3: $72,000/year - Single, Monthly

Profile: $72,000 annual salary, Single filer, paid monthly (12 paychecks/year)

Gross per period: $6,000.00
Federal income tax: -$584.17
Social Security: -$372.00
Medicare: -$87.00
Kentucky state income tax: -$210.00
Net take-home pay: $4,746.83 per paycheck ($56,962/year)
Effective total tax rate: 20.89%

Kentucky Tax Notes

  • Flat tax rate: 3.50% on all taxable income.
  • Supplemental withholding rate: 3.50% for bonuses and supplemental wages.

Kentucky does not impose local income taxes statewide (no state-level local income tax). Some municipalities impose occupational license fees (typically 1%–2.5%) on wages earned within city limits, including Louisville/Jefferson County, Lexington, and many smaller cities. These fees are separate from KY income tax.

OBBBA Conformity

Kentucky has decoupled from the federal OBBBA deductions. The tips and overtime deductions apply only on your federal return. Kentucky continues to tax those wages at its regular rates.

Frequently Asked Questions

What taxes are deducted from my Kentucky paycheck?
Your Kentucky paycheck has deductions for federal income tax (10%-37% progressive brackets), FICA (Social Security + Medicare), and Kentucky state income tax at a flat rate of 3.50%.
How accurate is this paycheck calculator?
This calculator estimates take-home pay using 2026 federal and Kentucky state tax rates. It models federal income tax, FICA, and state income tax. It does not include pre-tax deductions (401(k), HSA, health insurance premiums), post-tax deductions, or state-specific payroll taxes (disability insurance, paid leave). Your actual paycheck may differ.
How does Kentucky's flat income tax work?
Kentucky uses a flat tax rate of 3.50% that applies to all taxable income regardless of how much you earn. Unlike graduated-bracket states where higher income is taxed at higher rates, every dollar of taxable income in Kentucky is taxed at the same rate.
Is Kentucky's flat tax rate applied to all my income?
The flat rate applies to your taxable income, which is your gross income minus any applicable deductions or exemptions. Kentucky provides a standard deduction that reduces taxable income. The flat rate does not apply to income below these thresholds.
Is my pension or retirement income taxed in Kentucky?
Kentucky offers a partial exclusion for pension and retirement income. Some retirement income may be exempt or receive preferential treatment depending on the source and amount. Social Security benefits are not taxed at the state level.
How are bonuses and supplemental wages taxed in Kentucky?
Kentucky withholds state tax on bonuses, commissions, and other supplemental wages at a flat rate of 3.50%. This may differ from your regular withholding rate. At the federal level, supplemental wages are typically withheld at a flat 22% (or 37% above $1 million).
Does Kentucky conform to the OBBBA overtime and tips deductions?
No. Kentucky has decoupled from the federal OBBBA deductions for tips and overtime. The federal deductions still reduce your federal taxable income, but Kentucky adds them back, so your state tax on those wages is unchanged. Kentucky's individual income tax law is based on the IRC as of December 31, 2024 (KRS 141.010 conformity date). The OBBBA was enacted July 2025, after KY's conformity date. Kentucky does not conform to the OBBBA tips income deduction for TY2026. The 2026 KY withholding formula (Oct 2025) makes no mention of any tip income deduction. TODO_VERIFY: confirm no KY legislation adopted OBBBA conformity in the 2026 session.