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. Unlike Louisville Metro's straightforward 2.20% flat rate on all wages, NKY counties have unique structures that can include wage caps, tiered thresholds, and overlapping city taxes.

This guide breaks down how each county's occupational tax works in 2026, who pays it, and how it affects your take-home pay.

NKY Occupational Tax Comparison Table

How Do NKY Tax Caps Work?

Unlike most Kentucky cities that apply a flat percentage to all wages regardless of amount, some NKY jurisdictions historically applied caps or thresholds on how much of an employee's wage is subject to the local tax. Here's what you need to know:

Boone County

Boone County levies its occupational tax on all gross wages earned within the county. There is no wage base cap — the 0.80% rate applies from the first dollar earned. However, employees working in an incorporated city within Boone County (such as Florence, Union, or Burlington) typically pay the city rate only, not both the city and county rates.

Kenton County

Kenton County's 0.7879% occupational tax applies to all wages and net profits without a cap. The key nuance is that employees working in Covington pay Covington's 2.45% city rate, which replaces (not adds to) the county rate.

Campbell County

Campbell County's 1.00% tax applies to all earned income. Cities within Campbell County (Newport, Fort Thomas, Bellevue, Dayton) impose their own rates. Employees in those cities typically pay only the city rate, with appropriate crediting.

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% local tax (but is exempt from Kentucky state income tax under reciprocity)
• A Boone County resident working from home pays Boone County's 0.80% rate
• A remote worker whose employer is in Florence but who works from their Campbell County home pays the Campbell County 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

NKY's county-level rates are among the lowest in the state, which is one reason the region is attractive for employers and commuters from Cincinnati.

Calculate Your NKY Take-Home Pay

Use our Kentucky Local Occupational Tax Calculator to select your specific NKY city or county and instantly see how local taxes affect your paycheck. 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?

Generally no. If you work in an incorporated city (like Florence or Covington), you typically pay only the city rate. If you work in an unincorporated area of the county, you pay the county rate. Check with your employer's payroll department to confirm which jurisdiction applies to your worksite.

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

You owe Covington's 2.45% occupational tax on your wages. However, under Kentucky's reciprocity agreement with Ohio, you are exempt from Kentucky's 3.5% state income tax. You will still need to file an Ohio state return for your home state taxes. Use our Reciprocity Calculator to estimate your net pay.

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 the county or city where their business activities are conducted. The rate is typically the same as the employee occupational rate. Use our Self-Employment Tax Calculator to estimate your total tax burden.