Kentucky Occupational Tax Rates 2026
More than 200 Kentucky cities and half of the state’s 120 counties levy a local occupational (payroll) tax on wages earned within their borders. Rates range from 0% in unincorporated rural areas to 2.5% in Southgate and Madisonville. Whether a county fee is added to the city rate depends on the county: Kenton, Campbell, Boone, Scott, Jessamine and Boyle tax the whole county including the cities, so a Danville paycheck carries 1.90% for the city plus 1.25% for Boyle County. Madison, McCracken and Hardin tax only the area outside their city limits, so a Richmond paycheck carries the city’s 2% and nothing to Madison County.
All 52 rates in the table below were read from the levying city or county’s own 2026 rate schedule, or from the 2026 USDA NFC withholding bulletin, and every row links to the document it came from. A further 27 cities are listed underneath without a rate: we could not find a current published figure for them, and a guess in a table like this one gets repeated as fact.
Rates change by ordinance, sometimes mid-year: Ashland rose from 2.0% to 2.375% on January 1, 2026 and Winchester to 2.15% on October 1, 2024. Always confirm with your employer’s payroll department or your local government.
🔍 Instant Kentucky Occupational Tax Lookup
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| City / Area | County | 2026 Rate | Notes | Source |
|---|---|---|---|---|
| Louisville | Jefferson County | 2.20% | ✓City rate | Louisville Metro Revenue Commission |
| Lexington | Fayette County | 2.25% | ✓City rate | Lexington-Fayette Urban County Government |
| Covington | Kenton County | 2.45% | ✓City rate; Kenton County adds 0.6997% on top (3.1497% combined) | USDA NFC Bulletin — Kentucky City Income Tax Withholding (2026) |
| Bowling Green | Warren County | 2.00% | ✓City rate | City of Bowling Green Office of Occupational License |
| Owensboro | Daviess County | 1.78% | ✓City rate | City of Owensboro Department of Finance |
| Richmond | Madison County | 2.00% | ✓City rate; Madison County's 1.00% applies outside the city limits, not on top | Richmond Code of Ordinances § 110.03 |
| Florence | Boone County | 2.00% | ✓City rate; Boone County adds 0.80% on top (2.95% combined) | USDA NFC Bulletin — Kentucky City Income Tax Withholding (2026) |
| Georgetown | Scott County | 1.00% | ✓City rate; Scott County adds 1.00% on top (2.00% combined) | Georgetown-Scott County Revenue Commission |
| Elizabethtown | Hardin County | 1.95% | ✓City rate; Hardin County's 1.00% applies outside the city limits, not on top | City of Elizabethtown Finance Department |
| Nicholasville | Jessamine County | 1.50% | ✓City rate; Jessamine County adds 1.00% on top (2.50% combined) | City of Nicholasville Occupational Tax |
| Frankfort | Franklin County | 1.95% | ✓City rate | USDA NFC Bulletin — Kentucky City Income Tax Withholding (2026) |
| Paducah | McCracken County | 2.00% | ✓City rate; McCracken County's 1.00% applies outside the city limits, not on top | City of Paducah Business License and Payroll Tax |
| Radcliff | Hardin County | 2.00% | ✓City rate; Hardin County's 1.00% applies outside the city limits, not on top | City of Radcliff Finance Office |
| Ashland | Boyd County | 2.375% | ✓City rate | City of Ashland Occupational License Fee |
| Madisonville | Hopkins County | 2.50% | ✓City rate | Madisonville Code of Ordinances § 110.03 |
| Henderson | Henderson County | 1.65% | ✓City rate | City of Henderson Occupational License Tax |
| Hopkinsville | Christian County | 1.95% | ✓City rate | City of Hopkinsville Finance Department |
| Winchester | Clark County | 2.15% | ✓City rate | City of Winchester Occupational License Fees (Payroll Tax) |
| Murray | Calloway County | 1.00% | ✓City rate | City of Murray Occupational Tax |
| Danville | Boyle County | 1.90% | ✓City rate; Boyle County adds 1.25% on top (3.15% combined) | Boyle County Occupational Tax |
| Jefferson County (non-resident) | Jefferson County | 1.45% | ✓Withheld from non-residents working in the county; residents pay 2.20% | USDA NFC Bulletin — Kentucky County Income Tax Withholding (2026) |
| Kenton County | Kenton County | 0.6997% | ✓County-wide and in addition to any city fee; capped at $184,500 of wages ($1,290.95/yr) | Kenton County Fiscal Court — Business Services |
| Boone County | Boone County | 0.80% | ✓County-wide and in addition to any city fee; capped at $79,494 ($635.95/yr), plus a 0.15% senior-citizen & mental-health fee capped at $25/yr | USDA NFC Bulletin — Kentucky County Income Tax Withholding (2026) |
| Madison County | Madison County | 1.00% | ✓Applies to work outside the Richmond and Berea city limits — NOT added to those city rates | Madison County Occupational Tax Office |
| McCracken County | McCracken County | 1.00% | ✓Applies to work in the county outside the Paducah city limits — NOT added to the city rate | McCracken County Tax Administrator |
| Hardin County | Hardin County | 1.00% | ✓Unincorporated county only — NOT added to the Elizabethtown or Radcliff city rates | Hardin County Occupational Tax District |
| Jessamine County | Jessamine County | 1.00% | ✓County-wide including inside Nicholasville, so it stacks on the city's 1.50% | Jessamine County Occupational Tax Office |
| Scott County | Scott County | 1.00% | ✓Withheld alongside Georgetown's 1.00%; schools add 0.5% for county residents | Georgetown–Scott County Revenue Commission |
| Boyle County | Boyle County | 1.25% | ✓Everyone working in the county pays it, including inside Danville, where the city adds 1.90% (3.15% total) | Boyle County Occupational Tax |
| Clay County | Clay County | 1.00% | ✓County fee | USDA NFC Bulletin — Kentucky County Income Tax Withholding (2026) |
| McCreary County | McCreary County | 1.50% | ✓County fee | USDA NFC Bulletin — Kentucky County Income Tax Withholding (2026) |
| Ludlow | Kenton County | 2.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Taylor Mill | Kenton County | 2.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Erlanger | Kenton County | 1.50% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Park Hills | Kenton County | 1.50% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Villa Hills | Kenton County | 1.50% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Independence | Kenton County | 1.25% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Fort Mitchell | Kenton County | 1.25% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Crestview Hills | Kenton County | 1.15% | ✓City rate, capped at $184,500 of wages; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Fort Wright | Kenton County | 0.99% | ✓City rate, capped at $184,500 of wages; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Bromley | Kenton County | 1.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Crescent Springs | Kenton County | 1.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Lakeside Park | Kenton County | 1.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Ryland Heights | Kenton County | 1.00% | ✓City rate; Kenton County's 0.6997% is withheld on top (capped at $184,500 of wages) | Kenton County & Cities Occupational/Business License Guide (2026) |
| Southgate | Campbell County | 2.50% | ✓City rate, no wage cap; all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Wilder | Campbell County | 2.25% | ✓City rate, capped at $184,500 of wages ($4,151.25/yr); all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Alexandria | Campbell County | 1.50% | ✓City rate, capped at $184,500 of wages ($2,767.50/yr); all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Highland Heights | Campbell County | 1.50% | ✓City rate, raised from 1.00% on January 1, 2026; capped at $184,500 ($2,767.50/yr); all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Fort Thomas | Campbell County | 1.25% | ✓City rate, no wage cap; all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Cold Spring | Campbell County | 1.00% | ✓City rate, capped at $184,500 of wages ($1,845/yr); all three Campbell County fees (1.05% combined) are withheld on top, each capped separately | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Campbell County (unincorporated) | Campbell County | 1.05% | ✓0.90% general (cap $184,500) + 0.10% mental health (cap $184,500) + 0.05% senior citizens (cap $50,000, max $25/yr) | Campbell County Fiscal Court — 2026 Occupational License Tax Rates |
| Most rural counties (unincorporated) | Various | 0% | ✓Roughly half of Kentucky's 120 counties levy no occupational tax outside their cities | Kentucky Association of Counties — 2026 county occupational taxes |
Kentucky Cities With No Confirmed 2026 Rate
These 27 cities each administer their own occupational tax and do not publish a 2026 rate anywhere we could verify — several are not covered by their county’s collection agreement, so the county rate sheet does not list them either. Rather than print a figure we cannot stand behind, we have removed the rate. Ask your employer’s payroll department, or call the city’s finance or occupational tax office, and use the statewide calculator with the rate they give you.
| City | County | 2026 Rate | What we do know |
|---|---|---|---|
| Newport | Campbell County | Not confirmed | Self-collects; not part of Campbell County's collection agreement, so its rate is not on the county sheet |
| Bellevue | Campbell County | Not confirmed | Self-collects; not part of Campbell County's collection agreement, so its rate is not on the county sheet |
| Jeffersontown | Jefferson County | Not confirmed | A city rate applies on top of the Jefferson County fee, with a credit so the same wages are not taxed twice |
| Shively | Jefferson County | Not confirmed | A city rate applies on top of the Jefferson County fee, with a credit so the same wages are not taxed twice |
| St. Matthews | Jefferson County | Not confirmed | A city rate applies on top of the Jefferson County fee, with a credit so the same wages are not taxed twice |
| Berea | Madison County | Not confirmed | No 2026 rate published by the city |
| Mt. Sterling | Montgomery County | Not confirmed | No 2026 rate published by the city |
| Bardstown | Nelson County | Not confirmed | No 2026 rate published by the city |
| Shelbyville | Shelby County | Not confirmed | No 2026 rate published by the city |
| Stanford | Lincoln County | Not confirmed | No 2026 rate published by the city |
| Glasgow | Barren County | Not confirmed | No 2026 rate published by the city |
| Campbellsville | Taylor County | Not confirmed | No 2026 rate published by the city |
| Greensburg | Green County | Not confirmed | No 2026 rate published by the city |
| Columbia | Adair County | Not confirmed | No 2026 rate published by the city |
| Mayfield | Graves County | Not confirmed | No 2026 rate published by the city |
| Fulton | Fulton County | Not confirmed | No 2026 rate published by the city |
| Pikeville | Pike County | Not confirmed | No 2026 rate published by the city |
| Hazard | Perry County | Not confirmed | No 2026 rate published by the city |
| Middlesboro | Bell County | Not confirmed | No 2026 rate published by the city |
| Corbin | Whitley/Knox County | Not confirmed | No 2026 rate published by the city |
| London | Laurel County | Not confirmed | No 2026 rate published by the city |
| Harlan | Harlan County | Not confirmed | No 2026 rate published by the city |
| Somerset | Pulaski County | Not confirmed | No 2026 rate published by the city |
| Monticello | Wayne County | Not confirmed | No 2026 rate published by the city |
| Morehead | Rowan County | Not confirmed | No 2026 rate published by the city |
| Maysville | Mason County | Not confirmed | No 2026 rate published by the city |
| Elsmere | Kenton County | Not confirmed | Sources disagree on the 2026 rate |
How Kentucky Occupational Taxes Work
Kentucky occupational taxes are levied by local governments — cities and counties separately — under authority granted by KRS Chapter 92 and KRS Chapter 68. Unlike Kentucky’s 3.5% flat state income tax, which is applied after a $3,360 standard deduction, occupational taxes are typically applied to gross wages (before most deductions) earned within the taxing jurisdiction.
The tax is usually withheld by your employer and remitted quarterly. If you work in multiple jurisdictions during the year, you may owe different local rates for each location. Remote workers generally owe tax where they physically perform work.
Some jurisdictions allow a credit against their rate when tax has already been paid to another local government. Check with your employer or a tax professional if your situation is complex.
Frequently Asked Questions
Which Kentucky city has the highest occupational tax?
Southgate and Madisonville tie at 2.50%, followed by Covington at 2.45%, and Wilder, Ashland and Lexington all in the 2.25%–2.375% range. Once county fees are counted, Southgate is the most expensive place to work in Kentucky — its 2.50% plus Campbell County’s three fees (1.05% combined) comes to 3.55%. Wilder follows at 3.30% and Danville at 3.15% (1.90% city plus 1.25% for Boyle County).
Do you pay both the city and the county occupational tax?
It depends on the county — and this is the single most misreported fact about Kentucky payroll tax. Kenton, Campbell, Boone, Scott, Jessamine and Boyle tax the entire county including the incorporated cities, so both fees come out of the same paycheck; in Campbell County that means all three county levies (1.05% combined) on top of whatever the city charges. Madison, McCracken and Hardin tax only the area outside their city limits, so working in Richmond, Paducah, Elizabethtown or Radcliff you owe the city rate and nothing to the county. Those two rates should never be added together, even though most rate lists add them anyway.
Do I pay occupational tax where I live or where I work?
Where you work. If you live outside Louisville but drive to work there daily, you owe Louisville’s 2.2% on wages earned in the city.
Is the occupational tax on top of Kentucky state tax?
Yes — both taxes are independent. A Louisville worker pays state tax (3.5% after the $3,360 deduction) and the Louisville occupational tax (2.2% of gross wages) on the same paycheck.
Is the Louisville Metro occupational tax based on gross wages?
Yes. It applies to gross compensation, and per the Form OL-3 instructions, amounts deferred under Section 401(k), 403(b), or 457 plans must be included in the wage base. Your pre-tax retirement contributions lower your federal and Kentucky income tax, but they do not reduce the Louisville occupational tax.
Are self-employed workers subject to occupational tax?
Most jurisdictions apply the occupational tax to net profits from self-employment at the same rate as wages. You typically file a business net profits return directly with the local government rather than having an employer withhold it.
What if my city is not on this list?
First check the unconfirmed list above — 27 Kentucky cities levy an occupational tax but publish no rate we could verify, so they appear there without a number. Otherwise, contact your city or county finance department or ask your employer’s payroll team. There is no statewide rate table to look this up in: the Kentucky Department of Revenue does not administer local occupational taxes and refers questions to the local official who levies them. The Kentucky Occupational License Association — the association those local tax administrators belong to — keeps a list of links to Kentucky county and city sites, though a fair number of its entries are out of date.
Calculate Your Take-Home Pay With Local Tax
Once you know your city’s rate, use the calculator to see exactly how it affects your paycheck alongside federal and Kentucky state taxes.
City Calculators with Pre-Selected Local Rates
These city-specific calculators pre-load the correct local occupational tax rate so you get an accurate estimate instantly.
- Louisville (2.20%)
- Lexington (2.25%)
- Covington (2.45%)
- Bowling Green (2.00%)
- Owensboro (1.78%)
- Richmond (2.00%)
- Florence (2.00%)
- Georgetown (1.00%)
- Elizabethtown (1.95%)
- Nicholasville (1.50%)
- Frankfort (1.95%)
- Paducah (2.00%)
- Radcliff (2.00%)
- Ashland (2.375%)
- Madisonville (2.50%)
- Henderson (1.65%)
- Hopkinsville (1.95%)
- Winchester (2.15%)
- Murray (1.00%)
- Danville (1.90%)