Quick Answer
A local services tax (LST) is a flat annual fee, typically $52 per year, charged by some cities and school districts to fund local services. It's withheld from your paycheck in equal installments throughout the year — about $2 per paycheck for biweekly employees, regardless of your income level.
Best Answer
Sarah Chen, Payroll Tax Analyst
Best for W-2 employees who see LST deducted from their paychecks and want to understand what it funds
What is a local services tax (LST)
A local services tax (LST) is a flat annual fee imposed by local municipalities and school districts to fund essential services like fire protection, police, street maintenance, and emergency services. Unlike income taxes that vary with your earnings, LST is the same dollar amount for everyone who works in that locality.
The most common LST amount is $52 per year, though it can range from $10 to $156 annually depending on the municipality. This tax is withheld from your paycheck throughout the year in equal installments.
How LST withholding works on your paycheck
Your employer withholds LST based on where you work, not where you live. If you work in a city with a $52 annual LST, here's how it breaks down:
Example: LST withholding for different pay frequencies
Let's look at how a $52 annual LST appears on paychecks for a $60,000 salary:
Biweekly employee (26 paychecks):
Weekly employee (52 paychecks):
LST rates by location
Common Pennsylvania LST Rates
Combined LST Example
If you work in an area where both the municipality AND school district impose LST:
Who pays LST and who's exempt
Required to pay:
Exemptions:
Key differences from income taxes
What happens if you change jobs mid-year
If you change employers within the same taxing jurisdiction, your new employer should reduce your remaining LST withholding. For example:
Important: Bring documentation of LST already paid to avoid overpayment.
What you should do
1. Check your paystub: Look for "LST," "Local Services Tax," or "EIT" (Earned Income Tax) line items
2. Verify the correct amount: Confirm your employer is withholding the right annual amount for your work location
3. Keep records if you change jobs: Save paystubs showing LST paid if you switch employers mid-year
4. Budget for it: Factor this fixed cost into your monthly budget — it won't change with raises or bonuses
Key takeaway: Local services tax is a flat annual fee (typically $52) that funds local services, withheld equally from each paycheck regardless of your income — about $2 per biweekly paycheck for most employees.
Key Takeaway: Local services tax is a flat annual fee (typically $52) withheld equally from each paycheck to fund local services like fire and police protection — about $2 per biweekly paycheck.
LST withholding amounts by pay frequency for common annual rates
| Annual LST | Weekly | Biweekly | Semi-Monthly | Monthly |
|---|---|---|---|---|
| $10 | $0.19 | $0.38 | $0.42 | $0.83 |
| $32 | $0.62 | $1.23 | $1.33 | $2.67 |
| $52 | $1.00 | $2.00 | $2.17 | $4.33 |
| $104 | $2.00 | $4.00 | $4.33 | $8.67 |
| $156 | $3.00 | $6.00 | $6.50 | $13.00 |
More Perspectives
Sarah Chen, Payroll Tax Analyst
Best for people who moved to an area with LST and are seeing this new deduction on their paychecks
Why you're suddenly seeing LST on your paycheck
If you recently moved to Pennsylvania or another area with local services tax, this flat annual fee is likely new to you. Unlike the percentage-based income taxes you're used to, LST is a fixed dollar amount that everyone pays regardless of salary.
Most commonly, you'll see this if you:
Example: Moving from a non-LST area
Let's say you moved from Virginia (no LST) to work in Philadelphia, PA at $70,000/year:
Before (Virginia):
After (Philadelphia):
The impact is small — just $2 per paycheck — but it's an additional fixed cost you didn't have before.
What to expect in your new location
Pennsylvania (most common): Nearly every municipality and school district can impose LST. Expect to see 1-2 LST line items on your paystub totaling $52-$156 annually.
Other states: A few other states allow similar local taxes, but they may be called "occupational taxes," "business privilege taxes," or "municipal services fees."
Double-check you're not overpaying
Since LST is based on work location, make sure you're not paying in multiple jurisdictions:
Budget impact calculation
For a typical $52 annual LST:
This is a fixed cost that won't change with raises, bonuses, or lifestyle changes — factor it into your baseline monthly expenses.
Key takeaway: LST is a new fixed annual cost (typically $52) that appears when you work in certain municipalities, adding about $2-4 per paycheck regardless of your salary.
Key Takeaway: LST is a new fixed annual cost (typically $52) you'll see when working in certain municipalities, adding about $2-4 per paycheck as a flat fee for local services.
Sources
- IRS Publication 15-T — Federal Income Tax Withholding Methods
- Pennsylvania Department of Community and Economic Development — Pennsylvania Local Tax Information
Related Questions
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.