Pennsylvania paychecks in 2026: what changed
Pennsylvania's own rates didn't change for 2026; Philadelphia's wage tax did.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- Pennsylvania income tax: still 3.07%; employee unemployment compensation still 0.07%.
- Philadelphia wage tax from July 1, 2026: 3.735% residents, 3.425% non-residents.
- Minimum wage: still $7.25.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 Pennsylvania paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- Pennsylvania Department of Revenue — Employer withholding — flat 3.07% of compensation
- Pennsylvania Department of Revenue — REV-415 Employer withholding information guide — 401(k) elective deferrals are taxable
- Pennsylvania PIT Guide — Gross compensation — section 125 health coverage contributions are exempt
- Pennsylvania L&I — UC employee withholding — 0.07% of total gross wages, not limited to the taxable wage base
- Pennsylvania DCED — Act 32 earned income tax FAQ — withhold the higher of the resident or non-resident rate
- Pennsylvania DCED — Municipal Statistics: find your local tax
- Pennsylvania DCED — Local Services Tax — limited to $52 a year
- City of Philadelphia — Wage Tax (employers) — 3.735% residents, 3.425% non-residents from July 1, 2026
- Pennsylvania L&I — Overtime and tipped worker rules
- Pennsylvania Wage Payment and Collection Law — final pay by the next regular payday