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Lexington, Kentucky Paycheck Calculator (2026)

Last reviewed: April 20, 2026

Lexington-Fayette is Kentucky's second-largest metro and levies a 2.25% occupational license tax on wages earned in the urban county. The tax applies to residents and to non-residents who work within Lexington-Fayette, withheld at the source. Combined with Kentucky's 4% flat state tax, a Lexington-Fayette wage earner pays about 6.25% in state plus local income tax. Kentucky has no State Disability Insurance program funded by employee payroll. This calculator estimates 2026 take-home pay for a Lexington-Fayette wage earner after federal tax, FICA, Kentucky state tax, and the Lexington occupational license rate. It supports pre-tax 401(k) and HSA deductions.

$85,000 single filer take-home comparison

Lexington, Kentucky

$63,300

Kentucky (no city tax)

$65,200

Texas (no income tax)

$68,600

Lexington, Kentucky take-home is -$1,900 vs the state-only figure and -$5,300 vs the no-income-tax baseline.

Lexington, Kentucky local tax breakdown

Local bracket schedule applied by the calculator for 2026.

Taxable IncomeRate
$0+2.25%

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Lexington, Kentucky paycheck FAQ

How does Lexington-Fayette's tax compare to Louisville Metro's?
Lexington-Fayette sits at 2.25%, just below Louisville Metro's 2.28%. The two Kentucky metros produce nearly identical combined state plus local burdens for similar gross incomes.
Is the occupational license tax a city income tax?
Functionally, yes. Kentucky's occupational license tax is the local equivalent of a city income tax: a percentage of wages withheld at the source for work performed within the jurisdiction. The label differs, but the paycheck math is similar to a city income tax in Ohio or Pennsylvania.
Do non-residents working at the University of Kentucky pay the tax?
Yes. The 2.25% rate applies to wages earned within Lexington-Fayette regardless of the worker's residence. UK employees working on campus owe the tax through employer withholding.
Does Kentucky tax retirement income?
Kentucky exempts a substantial portion of pension and Social Security income at the state level. The Lexington occupational license tax applies to earned income (wages, self-employment) only, not retirement income.

See also

Run the full Kentucky paycheck calculatorCompare to Louisville paycheck calculatorCompare to Bowling Green, Kentucky paycheck calculatorCompare to Covington, Kentucky paycheck calculatorCompare to Owensboro paycheck calculatorCompare to Florence, Kentucky paycheck calculatorCompare to Henderson County, Kentucky paycheck calculatorCompare to Hopkinsville paycheck calculatorCompare to Frankfort, Kentucky paycheck calculatorCompare to Elizabethtown, Kentucky paycheck calculatorBrowse all city paycheck calculatorsBrowse paycheck calculators by statePaycheck and tax glossaryHow we calculate paycheck taxes

Reviewed

How This Page Is Reviewed

The Lexington, Kentucky paycheck page is reviewed against primary federal, state, and city sources before each major tax-year update. Source links below are the references used to validate brackets, wage bases, and supported local taxes.

Reviewed by

PaycheckCalc Research Desk

Last reviewed

2026-04-20