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Lexington, Kentucky Paycheck Calculator (2026)

Enter your annual salary below to see your Lexington, Kentucky take-home pay after federal, state, FICA, and city/local taxes for 2026.

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Cross-jurisdiction reciprocity for Lexington-Fayette residents who work outside the urban county is not modeled; the engine applies the Lexington-Fayette rate to the full wage base for selected residents.

Quick answer

Effectively yes. Lexington-Fayette levies a 2.25% occupational license tax on wages earned in the urban county, applied to both residents and non-residents at the source. At $85,000 single, take-home is $63,858 after federal tax, FICA, Kentucky's flat state line, and the Lexington-Fayette OLT.

Lexington-Fayette merged the city of Lexington and Fayette County in 1974, an early US city-county consolidation, and levies a 2.25% occupational license tax on wages earned in the urban county. The University of Kentucky, the state's flagship research university, anchors the resident employment base alongside UK HealthCare. Keeneland racetrack runs twice-yearly thoroughbred meets each spring and fall, and the Keeneland Yearling Sale is the world's leading thoroughbred bloodstock market. The Kentucky Horse Park, a state park dedicated to the horse, sits north of downtown. Bluegrass thoroughbred farms (Calumet, Three Chimneys, Lane's End) cluster on the pastures surrounding the city. Toyota Motor Manufacturing Kentucky in nearby Georgetown is Toyota's largest North American plant. Kentucky runs no payroll-funded state disability insurance program. The federal income tax owed on $85,000 single is $9,870, with Kentucky state tax at $2,857, FICA combined at $6,503, and the Lexington-Fayette OLT line at $1,913, for take-home of $63,858. Use the calculator above to adjust salary, model 401(k) and HSA deferrals, or compare Lexington against another Kentucky OLT city.

$85,000 single filer take-home comparison

Lexington, Kentucky

$63,900

Kentucky (no city tax)

$65,800

Texas (no income tax)

$68,600

Lexington, Kentucky take-home is -$1,900 vs the state-only figure and -$4,800 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%

What this estimate includes

This calculator computes Lexington, Kentucky take-home pay using 2026 federal brackets after the standard deduction, FICA contributions (Social Security up to the annual wage base, Medicare on all wages, plus the Additional Medicare Tax above the filing-status threshold), Kentucky's state income tax schedule, the Lexington, Kentucky local income tax. It excludes employer-side payroll taxes, custom W-4 elections, supplemental-wage handling for bonuses or equity vesting, and income from sources other than W-2 wages. Per-city resident and non-resident rules are described in the prose above where they differ.

Lexington, Kentucky paycheck FAQ

What is the federal tax bill on $85,000 single in Lexington?
The federal income tax owed on $85,000 single is $9,870, with the top slice in the 22% bracket after the standard deduction. Federal mechanics apply uniformly across all states, so a Lexington single filer sees the same federal line as a Louisville or Bowling Green counterpart at this gross.
How is Lexington-Fayette's OLT structured?
Lexington-Fayette's 2.25% OLT applies to anyone earning wages in the urban county, with no resident-vs-non-resident split. The merged city-county government collects the tax through employer withholding. At $85,000, the OLT line resolves to $1,913 on the year. UK employees pay the standard rate on campus wages.
Do non-residents commuting into Lexington for work pay the OLT?
Yes. Lexington-Fayette's OLT is work-location based, not residence-based, so a commuter from Frankfort, Georgetown, or Richmond who works in Lexington pays the 2.25% at the source. A Lexington resident working at the Toyota Georgetown plant pays Georgetown's rate, not Lexington's. The OLT follows work location.
How much does a 401(k) contribution save at $85,000 in Lexington?
Pre-tax 401(k) and HSA contributions at $85,000 reduce federal and Kentucky taxable income at a combined marginal rate of 25.5%. Lexington-Fayette's OLT is assessed on gross wages, so pre-tax deferrals trim the federal and state lines but typically not the OLT layer. Three lines respond differently to one deferral.
What changes for married filing jointly, head of household, or filing separately at $85,000 in Lexington?
MFJ at $85,000 clears about $67,888, a delta of $4,030 more the single figure. Wider federal MFJ brackets and the doubled federal standard deduction drive most of the change. Kentucky's flat state rate is filing-status-neutral, and the Lexington-Fayette 2.25% OLT applies per worker across all four filing statuses. Head of Household reaches about $66,780, around $2,922 more than Single, and combined MFS take-home runs about $4,030 less than MFJ.
How does Lexington compare to Louisville?
Louisville Metro's OLT sits just above Lexington-Fayette's 2.25%, with the two metros producing nearly identical combined state-and-local burdens for similar gross incomes. Federal tax, FICA, and Kentucky's flat state line are identical between them. The structural difference is mainly the small headline rate gap and the urban-county-vs-metro government framework.

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

2026-06-25