Colorado Springs has no local income tax and no city wage tax. Nothing is withheld from your paycheck for the city itself, and the city does not impose an occupational privilege tax the way Denver does. The only income tax coming out of your wages in Colorado Springs is the state’s, plus federal.
Why the City Doesn’t Tax Wages
Colorado Springs is a home rule city under Article XX of the Colorado Constitution, which gives it broad authority over local taxation.1Code Library. City Code of Colorado Springs, Colorado – 12.1.102 Legislative Findings That authority is limited by the Taxpayer’s Bill of Rights (TABOR), which requires voter approval before any Colorado government can create a new tax or raise a rate. Colorado Springs voters have never approved a local income tax, and no such measure has appeared on a city ballot. The city funds itself instead through sales tax, property tax, and utility and service fees.
No Occupational Privilege Tax Either
People asking about a Colorado Springs wage tax usually have Denver’s Occupational Privilege Tax in mind. Denver charges every employee who earns at least $500 in a month a flat $5.75, and the employer owes another $4.00 per taxable employee.2City and County of Denver. Business Tax FAQs Aurora repealed its own occupational privilege tax effective January 1, 2025.
Colorado Springs has never adopted one. Employers don’t remit a per-head monthly amount to the city, and employees keep roughly $69 more per year than they would working in Denver. One caveat if you commute: the obligation follows where you work, not where you live, so check your workplace city’s rules if it isn’t Colorado Springs.
What Actually Comes Out of Your Paycheck
Colorado taxes wages at a flat 4.40% of federal taxable income for tax years beginning on or after January 1, 2022, and before January 1, 2027.3Colorado General Assembly. Initiative 2025-2026 No 21 Income Tax Rate Your employer withholds this amount from every paycheck and sends it to the Colorado Department of Revenue.4Cornell Law Institute. Colorado Code 39-22-604 – Colorado Income Tax Withholding You reconcile it on Form DR 0104 by April 15. Colorado grants an automatic six-month filing extension to October 15 with no separate paperwork, but at least 90% of your liability still has to be paid by April 15 to avoid penalties and interest.5Department of Revenue – Taxation. Individual Income Tax Due Dates and Filing Extension
Federal income tax and FICA come out the same way they would anywhere else in the country. Nothing on your Colorado Springs stub is going to the city.
The FAMLI Line Isn’t a City Tax
One deduction that sometimes gets mistaken for a local tax is the Colorado Family and Medical Leave Insurance (FAMLI) premium. It is a statewide program, not a city charge. For 2026 the total premium rate is 0.88% of wages, generally split evenly between employer and employee at businesses with ten or more workers; smaller employers may pass the full premium to employees. It funds paid family and medical leave benefits, and none of it goes to Colorado Springs.
Where Colorado Springs Gets Its Money Instead
Since you’ll see these taxes locally even though your wages aren’t touched, it helps to know what to expect. The city sales tax rate is 3.07%, broken into 2.00% for the General Fund, 0.10% for Trails, Open Space, and Parks, 0.40% for public safety, and 0.57% for road improvements. Combined with the 2.90% state rate, 1.23% El Paso County rate, and 1.00% Pikes Peak Rural Transit Authority rate, the total on most purchases is 8.20%.6City of Colorado Springs. General Sales Tax Information Because Colorado Springs is home rule, it administers its own sales tax separately from the state, and a city use tax applies when you bring untaxed goods into the city.7City of Colorado Springs. Sales Tax
Property tax is handled at the county level by the El Paso County Assessor. For 2026, the residential assessment rate is 6.8%, applied after a 10% reduction on the first $700,000 of actual value, with a minimum assessed value of $1,000.8Colorado Division of Property Taxation. Residential Local Government Assessment Rate The mill levy varies by which taxing districts overlap your parcel, so two homes with identical market values in different parts of Colorado Springs can have different tax bills. None of this touches your paycheck, but it is where the local money comes from in the absence of a wage tax.