Northern Kentucky Occupational Tax Caps: Boone, Kenton & Campbell County Guide (2026)

Northern Kentucky's three largest counties — Boone, Kenton, and Campbell — each impose their own occupational license fee on wages earned within their boundaries. Two things make NKY genuinely different from the rest of Kentucky, and most guides get both of them wrong:

1. The county fee stacks on top of the city rate. It is not an either/or. If you work in Covington, you are withheld Covington's rate and Kenton County's.
2. Those fees stop at an annual wage cap. Once you hit the cap, that line disappears from your check for the rest of the year — so your effective local rate falls as your income rises.

Everything below comes from each county's own published 2026 rate schedule.

NKY Occupational Tax Rates and Caps (2026)

Note that Boone and Campbell each levy more than one fee. Their published county rate is the sum: Boone is 0.95% combined (0.80% + 0.15%) and Campbell is 1.05% combined (0.90% + 0.10% + 0.05%), not the round 1.00% often quoted.

How the Caps Actually Work

The NKY caps are not historical trivia — they are live, and in Kenton and Campbell County they are pegged to something familiar: the Social Security wage base. Kenton County's 2026 rate sheet literally prints "FICA Cap" in its cap column, which is why the figure moved from $176,100 in 2025 to $184,500 in 2026 in lockstep with the federal wage base.

The practical effect is that Northern Kentucky local tax is regressive. In Covington, both the city and county fees run to the same $184,500 ceiling, so the combined rate holds at 3.15% and then falls:

In Florence the caps bite much earlier, because the two Boone County fees stop at $79,494 and $16,666 while the city fee runs to $184,500:

A Florence worker on $250,000 pays a lower share of their wages in local tax than a Florence worker on $50,000 — 1.74% against 2.85%. That is the single most important thing to understand about NKY payroll tax, and it is why a flat-rate calculator will overstate local tax for high earners in this region.

Boone County

Boone County levies two payroll fees, both authorized by fiscal court ordinance and both capped:

• The occupational fee is 0.80% (Ordinance #07-27) on the first $79,494 of wages — a maximum of $635.95 for the year.
• The mental health / aging fee ("MHID") is 0.15% (Ordinance #07-26) on the first $16,666 — a maximum of just $25.00.

Boone County's own rate schedule is unambiguous about who owes them: "Any employee working in Boone County or receiving compensation deriving from Boone County is subject to this tax." Working inside Florence, Union, or Burlington does not exempt you. A Florence employee is withheld Florence's 2.00% and both Boone County fees.

One extra Boone levy catches people out: the Boone County Board of Education tax of 0.50%, which has no maximum. Unlike the fees above, it is conditional on residence — it applies only if you both work in and live in the Boone County School District. Residents of the Walton-Verona district are exempt. Because it depends on where you live rather than where you work, it is not part of the standard work-location withholding calculation.

Kenton County

Kenton County's occupational fee is 0.6997%, capped at the FICA wage base of $184,500, for a maximum of $1,290.95 a year.

If you have seen 0.7879% quoted for Kenton County, that is a stale figure from an earlier year that is still widely repeated. The current rate is 0.6997%, and it is easy to verify from the cap arithmetic: $1,290.95 ÷ $184,500 = 0.6997%.

Kenton County's 2026 schedule lists the countywide fee as a separate withholding line beside each city's rate — Covington at 2.45%, Erlanger at 1.50%, Ludlow and Taylor Mill at 2.00%, Independence and Fort Mitchell at 1.25%, and so on. The city rate does not replace the county fee. A Covington employee is withheld both, for a combined 3.15% up to the shared $184,500 ceiling.

Campbell County

Campbell County splits its levy into three fees, and its published rate schedule removes any doubt about stacking — the table is headed, verbatim, "Locality (All employees are subject to all 3 County Rates)":

• General occupational: 0.90%, capped at $184,500 (max $1,660.50)
• Mental health: 0.10%, capped at $184,500 (max $184.50)
• Senior citizens: 0.05%, capped at $50,000 (max $25.00)

That is 1.05% on the first $50,000 of wages and 1.00% from there to $184,500. City rates in Campbell County sit on top: Fort Thomas 1.25% (no cap at all), Alexandria and Highland Heights 1.50%, Cold Spring 1.00%, Wilder 2.25%, and Southgate 2.50%. There is no crediting mechanism anywhere in the county's schedule.

Newport is the outlier administratively — it collects its own 2.50% payroll tax rather than going through the county's collection service — but the county fee still applies to wages earned there. That makes a Newport worksite the highest combined local burden in Northern Kentucky at about 3.55% on the first $50,000, ahead of Covington's 3.15%.

Who Pays NKY Occupational Tax?

Occupational taxes in Kentucky are assessed based on where the work is physically performed, not where the employee lives. This means:

• An Ohio resident commuting to work in Covington pays Covington's 2.45% plus Kenton County's 0.6997% — about 3.15% combined — while being exempt from Kentucky state income tax under reciprocity
• Someone working in unincorporated Boone County pays the county's 0.95% (0.80% + 0.15%) and no city rate
• A remote worker living in Campbell County and working from home for a Florence employer owes Campbell County's three fees, totalling 1.05%, because that is where the work happens — not Florence's rate

Important: If you work in Northern Kentucky and live in Ohio, Indiana, or another reciprocal state, use our Kentucky Reciprocity Calculator to see how state tax exemption works alongside local occupational taxes.

How NKY Rates Compare to the Rest of Kentucky

Taken alone, NKY's county rates are among the lowest in the state, which is where the region's low-tax reputation comes from. But once the city rate is stacked on top, a Covington or Newport worksite carries a higher local burden than Louisville or Lexington — until you pass the wage cap, after which NKY becomes the cheaper place to earn.

Calculate Your NKY Take-Home Pay

Our Kentucky Local Occupational Tax Calculator has Covington and Florence built in with their county fees and wage caps applied automatically, so the cap effects above are reflected in your result. For a Campbell County worksite, enter the combined rate from the tables above in the custom rate field. You can also view the full list of rates on our Kentucky Tax Rates reference page.

Frequently Asked Questions

Do I pay both the county tax and the city tax in Northern Kentucky?

In Boone, Kenton and Campbell County, yes — this is what makes NKY different from most of the state. Each county's published schedule says so directly: Boone taxes "any employee working in Boone County," and Campbell's rate sheet is headed "All employees are subject to all 3 County Rates." Working inside Florence, Covington or Newport does not exempt you from the county fee. Elsewhere in Kentucky the opposite is usually true — Hardin County, for example, levies nothing on wages earned inside Elizabethtown — which is where the "city instead of county" myth comes from.

I live in Ohio but work in Covington. What taxes do I owe?

Covington's 2.45% plus Kenton County's 0.6997%, for about 3.15% of your wages, both stopping at $184,500 for the year. Under Kentucky's reciprocity agreement with Ohio you are exempt from Kentucky's 3.5% state income tax, but reciprocity does not touch local occupational tax — that follows your worksite regardless of residence. You will still file an Ohio return. Use our Reciprocity Calculator to estimate your net pay.

Does the Northern Kentucky occupational tax have a wage cap?

Yes, and it is the region's defining feature. Kenton County's fee and Covington's city fee both stop at $184,500 for 2026 — the same figure as the Social Security wage base, which Kenton's rate sheet labels the "FICA Cap." Boone County's fees stop far sooner, at $79,494 and $16,666. Campbell's general and mental health fees stop at $184,500 and its senior citizens fee at $50,000. Fort Thomas's 1.25% city rate has no cap at all.

Is Kenton County's occupational tax 0.7879% or 0.6997%?

0.6997% for 2026. The 0.7879% figure is from an earlier year and is still widely republished. Check it against the published maximum: the most Kenton County can withhold in 2026 is $1,290.95, and $1,290.95 ÷ $184,500 = 0.6997%.

Are self-employed workers in NKY subject to occupational tax?

Yes. Self-employed individuals, sole proprietors, and LLC members must file a Net Profits Tax Return with each county or city where their business activities are conducted. Net profit rates can differ from the employee withholding rate — Kenton County, for instance, applies 0.9097% to net profits under $88,050 and 0.1097% above that, rather than the flat 0.6997% used for payroll. Use our Self-Employment Tax Calculator to estimate your total tax burden.