A Kentucky paycheck has federal income tax, Social Security (6.2% up to the 2026 wage base of $184,500), and Medicare (1.45%), plus a flat 4.00% Kentucky state income tax, and local income tax in some cities. On a $65,000 single-filer salary, estimated Kentucky take-home is about $51,808 a year, or $1,993 per biweekly paycheck.
PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, accounting, employment, benefits, or payroll advice. PayslipIQ is not a CPA firm, law firm, financial advisor, payroll provider, or tax authority. Always verify your paycheck, deductions, withholdings, and tax position with your employer's payroll department, a qualified CPA, the IRS, your state tax authority, or another appropriately qualified professional. Calculations are estimates; your actual paycheck may differ based on factors specific to your employer, location, benefits elections, and personal tax situation.
Kentucky: the local picture
Kentucky runs a flat 4.0% state income tax (down from 4.5% in 2024). Many Kentucky cities and counties also levy an Occupational License Tax (OLT) on payroll, ranging from 0.5% to 2.5%. Louisville Metro charges 1.45%.
Every Kentucky worker pays federal income tax, calculated on the W-4 you submitted to your employer using the IRS Publication 15-T tables. Federal income tax is followed by FICA: 6.2 percent Social Security up to the annual wage base, plus 1.45 percent Medicare on every dollar. The 0.9 percent Additional Medicare Tax applies once year-to-date wages cross $200,000 single or $250,000 married filing jointly.
Kentucky adds a flat state income tax of approximately 4.00 percent. Verify the current rate with the Kentucky Department of Revenue.
Local taxes: Kentucky has cities or counties that levy local income tax on top of state tax. Common examples are noted on the local-tax page.
What changed recently in Kentucky
State flat rate cut to 4.0% in 2025, with future cuts tied to revenue triggers.
Local OLT rates adjusted by individual cities and counties.
Kentucky payroll quirks workers should know
OLT line on most Kentucky paychecks for work in incorporated areas.
OLT applies based on where work is performed, not where the employee lives.
Both city OLT and county OLT can stack.
Example breakdown
A hypothetical Kentucky worker on a $65,000 annual salary, paid bi-weekly, single filer, no extra adjustments. Educational only, your real paycheck differs.
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Frequently asked questions
Does Kentucky have state income tax?
Yes. Kentucky uses a flat state income tax rate. Verify the current rate with the Kentucky Department of Revenue.
Are there local income taxes in Kentucky?
Yes. Kentucky has cities or counties that add local income tax on top of state tax. Check your specific city.
Does Kentucky have State Disability Insurance or Paid Family Leave premiums?
No. Kentucky does not have state-mandated SDI or PFL employee premiums.
Does Kentucky have daily-overtime rules?
No. Kentucky follows federal FLSA: 1.5x for hours above 40 in a workweek.
What is FICA on a Kentucky paycheck?
FICA is federal: 6.2 percent Social Security up to the annual wage base, plus 1.45 percent Medicare on every dollar. The 0.9 percent Additional Medicare Tax applies above $200,000 single or $250,000 married filing jointly. FICA applies in every state.
Where do I verify Kentucky state tax withholding?
The Kentucky Department of Revenue (https://revenue.ky.gov/) is the authoritative source. For your specific paycheck, contact your employer's payroll team or a CPA.
What is the OLT on my Louisville paycheck?
Louisville Metro Occupational License Tax, 1.45% of wages for work in Louisville Metro.
I work in two Kentucky counties. Do I owe OLT to both?
Possibly. OLT is sourced to the location where the work was performed. Talk to payroll about how they allocate your hours.