Pennsylvania has 13.1 million residents, two large metro areas at opposite ends of the state and housing that costs well below the national median. Its tax system is unusual: a low flat state income tax that exempts retirement income, combined with local wage taxes in almost every town and the highest city wage tax in the country in Philadelphia. This guide collects the numbers and rules that matter if you live in Pennsylvania or plan to move there.
Pennsylvania guides
Pennsylvania taxes
A 3.07% flat income tax, local wage taxes, a 6% sales tax that skips clothing and groceries, and an inheritance tax. Read the tax guide.
Moving to Pennsylvania
Register your car within 20 days and get a Pennsylvania license within 60. See the step-by-step guide.
Pennsylvania paycheck calculator
Estimate take-home pay after federal, state and local wage taxes. Open the calculator.
What is different about Pennsylvania
A flat income tax that skips retirement income
Pennsylvania taxes income at a flat 3.07%, with no standard deduction. Social Security, pensions and IRA and 401(k) withdrawals after retirement are not taxed, which makes the state attractive to retirees. Details are in our Pennsylvania tax guide.
Local wage taxes almost everywhere
Most municipalities and school districts levy an earned income tax, commonly about 1% to 2% of wages combined. Philadelphia’s wage tax is 3.735% for residents from July 1, 2026, and Pittsburgh’s combined rate is 3%. Many towns also charge a Local Services Tax of up to $52 a year on people who work there.
Affordable housing by Northeast standards
The median home value of $254,500 is about 24% below the national median, and median rent of $1,209 is about 14% lower. 69.3% of homes are owner-occupied.
No sales tax on clothing or groceries
The 6% state sales tax does not apply to most clothing, shoes or groceries. Allegheny County (Pittsburgh) adds 1% and Philadelphia adds 2%.
Annual safety inspections
Every registered vehicle needs a yearly safety inspection, and vehicles in 25 counties, including the Philadelphia and Pittsburgh regions, also need an emissions test.
An inheritance tax
Pennsylvania is one of the few states that tax heirs: 4.5% for children and grandchildren, 12% for siblings and 15% for others. Spouses pay nothing.
Pennsylvania at a glance
| Measure | Pennsylvania | United States |
|---|---|---|
| Population, July 1, 2025 | 13,059,432 | 341,784,857 |
| Population change, 2020–2025 | +0.4% | +3.1% |
| Median household income | $77,971 | $80,734 |
| Median home value | $254,500 | $332,700 |
| Median gross rent | $1,209 | $1,413 |
| Homeownership rate | 69.3% | 65.2% |
| Poverty rate | 11.6% | 10.6% |
| Bachelor’s degree or higher (age 25+) | 35.2% | 35.7% |
| Land area | 44,742 sq mi | 3,533,038 sq mi |
| People per square mile (2020) | 290.6 | 93.8 |
Source: U.S. Census Bureau QuickFacts. Income, home value, rent, homeownership and education are 2020–2024 American Community Survey estimates; income is in 2024 dollars.
Largest cities
| City | Population (July 2025) |
|---|---|
| Philadelphia | 1,574,281 |
| Pittsburgh | 307,632 |
| Allentown | 126,044 |
| Reading | 95,832 |
| Erie | 91,838 |
| Scranton | 75,514 |
Source: U.S. Census Bureau, Vintage 2025 population estimates, via City Population. Figures are for city limits, not metro areas. Harrisburg is the state capital.
Frequently asked questions
What is Pennsylvania’s income tax rate?
A flat 3.07% on taxable income. Local earned income taxes are added on top in most places.
Does Pennsylvania tax retirement income?
No. Social Security, pensions and retirement account withdrawals after retirement age are exempt from the state income tax and from local earned income taxes.
Is Pennsylvania cheaper than the U.S. average?
For housing, yes: the median home value and rent are both below national medians. Local wage taxes and property taxes, which average about 1.26% of home value, offset part of the difference.
What do I need to do after moving to Pennsylvania?
Title and register your vehicle within 20 days and get a Pennsylvania driver license within 60 days. Our Pennsylvania moving guide lists every step.
Last updated: November 5, 2026.