Lexington Local Income Tax: What It Means for Your Paycheck (2026)
Calculator scope: ExactTakeHome currently calculates federal and Kentucky state income tax. Local income taxes are not included in the calculator.
What is Lexington's Local Income Tax?
Lexington levies a occupational license tax on earned wages at 2.25% for residents. Flat occupational license tax on wages. According to https://www.lexingtonky.gov/, the Lexington occupational license tax rate for residents is 2.25% as of 2026.
How Much Does Lexington's Local Tax Cost?
| Annual Salary | Estimated Local Tax (2.25%) | Monthly Local Tax |
|---|---|---|
| $40,000 | $900 | $75 |
| $60,000 | $1,350 | $113 |
| $75,000 | $1,688 | $141 |
| $100,000 | $2,250 | $188 |
| $150,000 | $3,375 | $281 |
Estimated using the occupational tax rate.
These are estimates of the local tax component only. Your total paycheck deductions also include federal income tax, Social Security, Medicare, and Kentucky state income tax.
Calculate Your Federal and State Taxes
ExactTakeHome currently calculates federal and Kentucky state income tax for Lexington residents. To estimate your take-home pay excluding local tax, use the Kentucky calculator and add the local tax amount from the table above for a full planning estimate.
Does Lexington's Local Tax Apply to Remote Workers?
Lexington occupational tax generally applies based on work performed and local rules for remote workers.
Frequently Asked Questions
2.25% occupational license tax for residents. Source: https://www.lexingtonky.gov/.
Residents of Lexington and workers who earn wages from work performed in Lexington may owe local income tax. Rules vary by residence and work location — verify with https://www.lexingtonky.gov/.
An estimated $1,688 per year ($141 per month) at the 2.25% rate. This is an estimate of the local component only.
No. ExactTakeHome currently calculates federal and Kentucky state income tax. Local income taxes are not included in the calculator.
Use the Kentucky calculator on ExactTakeHome for federal and state withholding, then subtract the estimated local tax from the table on this page for a planning estimate.