The Cities That Tax Your Paycheck (On Top of State Tax)

Most cost-of-living tools model federal tax and state tax. A surprising number stop there — which means they miss a line that can cost you $5,000 a year.

More than a dozen US cities levy their own income tax. Here are the ones in our dataset:

These stack on top of state tax. A Philadelphia resident pays Pennsylvania's 3.07% and the city's 3.75% — 6.82% combined before federal tax touches anything.

The combinations that hurt

Portland, Oregon is the worst pairing in our data. Oregon's top rate is 9.9%, Portland adds 1.5%, and the combined effective tax on $120,000 reaches 32.3% — the highest of any city we track, higher than New York City.

That surprises people, because Portland's rent ($1,700/month) is genuinely reasonable. The tax burden erases the housing advantage. On $100,000, Portland's real purchasing power is $45,047, sitting just below Seattle's despite rent being $500/month cheaper.

New York City is the famous one: 6.85% state plus 3.876% city, 31.7% effective on $120,000, and the highest rent in the dataset. It's the toughest combination in America for a salaried worker.

Baltimore flies under the radar. Maryland's county income taxes are unusually high — Baltimore City charges 3.2% — pushing effective tax to 30.2%, higher than San Francisco's 28.8%.

The ones that are worth it anyway

Local tax isn't automatically disqualifying. Cleveland charges 2.5% on top of Ohio state tax and still delivers $62,893 of real purchasing power on $100,000 — fifth-best in our entire dataset — because rent is $1,100 a month.

Kansas City and St. Louis charge 1% and land at $63,485 and $61,956 respectively, both beating every no-income-tax coastal city.

Cheap housing beats a clean tax bill. That's the recurring lesson.

Watch the border

City income taxes usually apply to residents, and often to nonresidents who work in the city.

Philadelphia charges nonresidents who work in the city a slightly lower rate than residents. Live in the suburbs, work downtown, and you still pay. New York City is the opposite — the city tax applies to residents only, so commuting in from New Jersey or Westchester avoids it entirely. That single distinction is worth thousands of dollars a year and explains a lot about where people live around New York.

Ohio cities generally tax where you work, with partial credits from your home city. If you live in one Ohio suburb and work in another, you may owe both, and the credit rules are genuinely complicated.

Before signing a lease, check whether crossing a municipal line changes your rate. Around Philadelphia, Portland, and the Ohio metros, it often does.

The takeaway

When comparing offers between cities, confirm your calculator includes local income tax. Ours does — it's why New York to Philadelphia shows $59,698 replacing a $100,000 NYC salary, which correctly accounts for Philadelphia's 3.75% city wage tax rather than pretending Pennsylvania's 3.07% is the whole story.

A tool that skips this line will tell you Philadelphia is cheaper than it is.

General information, not tax advice. Local rates change; verify with the city's revenue department.

Your move. Our math.