If you live or work in Erie, Pennsylvania, the tax rates you should know about are these: property tax through three combined millage rates (the City of Erie’s portion is 14.12 mills for 2026), a 1.65 percent local earned income tax on wages, Pennsylvania’s flat 3.07 percent state income tax, a $52 annual local services tax for anyone employed in the city, and 6 percent sales tax on most retail purchases in Erie County. Real estate sales, hotel stays, and self-employment income carry their own additional layers on top.
Property Tax and Millage Rates
Property tax is the largest local bill most Erie homeowners face, and three separate taxing bodies each set their own rate. The City of Erie’s 2026 millage is 14.12 mills, made up of 13.51 mills for general operations and 0.61 mills for debt service.1City of Erie. City of Erie 2026 Budget Erie County and the Erie City School District add their own millage independently, and you pay all three combined. The county publishes the complete millage chart for every taxing district on its assessment office website.2Erie County, PA. Documents and Forms
One mill equals one dollar of tax for every $1,000 of assessed value. To estimate your annual bill, multiply your assessed value by the combined millage, then divide by 1,000. A home assessed at $100,000 with a combined rate of roughly 34 mills would owe about $3,400 before any discounts or exclusions.
Assessed values are set by the Erie County Assessment Bureau under Pennsylvania’s Consolidated County Assessment Law.3Pennsylvania General Assembly. Pennsylvania Code 8801 – Short Title and Scope of Chapter If you think yours is too high, you can appeal to the county’s Board of Assessment Appeals; the strongest appeals rely on recent comparable sales or a professional appraisal.
Payment Deadlines and Discounts
You get three separate property tax bills each year, and each has its own discount window, face amount, and late penalty. Missing the dates costs real money.
- City tax: 2 percent discount if paid by the end of March. Face amount is due through May 31. A 10 percent penalty applies after May 31.4City of Erie. City Treasurer
- County tax: 2 percent discount if paid by the end of April. Face amount is due by June 30.4City of Erie. City Treasurer
- School tax: 2 percent discount if paid by the end of September. Face amount is due by November 30, with a 10 percent penalty after.4City of Erie. City Treasurer
Unpaid bills eventually move to the Erie County Revenue and Tax Claim Bureau, which handles delinquent collection countywide and can pursue a tax sale.5Erie County, PA. Revenue and Tax Claim Bureau If you fall behind, contact the bureau about payment arrangements before it gets that far.
Homestead Exclusion
Owner-occupied homes in Erie may qualify for the homestead exclusion, which reduces the assessed value used to calculate the school district’s tax. Under Pennsylvania’s Taxpayer Relief Act, every approved homestead in a district gets the same flat dollar reduction, funded through state gaming revenue.6Pennsylvania Department of Community and Economic Development. Property Tax Relief Through Homestead Exclusion
The property has to be your primary residence. Condominiums and cooperatives qualify; rental properties and second homes do not. You file the application with the county assessment office, and school districts have to notify homeowners by December 31 each year if a property was denied.6Pennsylvania Department of Community and Economic Development. Property Tax Relief Through Homestead Exclusion The actual dollar reduction changes each year based on available funding, so check with the Erie City School District or county assessment office for the current amount.
Local Earned Income Tax
Anyone earning wages or self-employment income while living in the City of Erie owes a combined earned income tax of 1.65 percent on gross earnings.1City of Erie. City of Erie 2026 Budget The rate is authorized by Pennsylvania’s Local Tax Enabling Act.7Pennsylvania General Assembly. Local Tax Enabling Act Part of that 1.65 percent is a 0.65 percent distressed municipal pension recovery tax levied under Act 205.8eCode360. Erie Code – Article 371 Earned Income Tax
Non-residents who work inside the city limits also owe earned income tax, but the non-resident rate under Act 511 is generally capped at 1 percent. Employers withhold the tax and remit it to the designated tax officer, so W-2 employees see the deduction automatically. If you’re self-employed, you pay it yourself when you file.
Pennsylvania State Income Tax
Every Erie resident also pays Pennsylvania’s personal income tax at a flat 3.07 percent on taxable income.9Commonwealth of Pennsylvania. Tax Rates Unlike the federal system, Pennsylvania uses one rate for every income level. Taxable income covers wages, interest, dividends, business profits, rental income, and capital gains.
Pennsylvania does not offer a standard deduction or personal exemptions the way the federal return does. That surprises people moving from other states. Combined with the 1.65 percent local rate, Erie residents effectively pay 4.72 percent in state and local income tax on wages before federal tax enters the picture.
Local Services Tax
Every person who works within the City of Erie owes a Local Services Tax of $52 per year, whether or not they live in the city.10eCode360. Erie Code – Article 375 Local Services Tax Employers withhold it on a pro-rata basis, so it appears as a small deduction on each paycheck instead of a lump sum. If you work in more than one Pennsylvania municipality during the year, the total across all of them is capped at $52.11Pennsylvania Department of Community and Economic Development. Local Services Tax (LST)
Workers earning less than $12,000 from all sources within the city during the calendar year are exempt. To claim the exemption, file a certificate with your employer and the city stating you expect to earn below the threshold.10eCode360. Erie Code – Article 375 Local Services Tax
Sales Tax in Erie County
Sales tax on purchases in Erie County is 6 percent, which is Pennsylvania’s statewide base.12Pennsylvania Code and Bulletin. Pennsylvania Code 61 Chapter 31 – Imposition Erie County adds no local surcharge, unlike Allegheny County or Philadelphia. Six percent is the full rate.
Pennsylvania exempts most groceries and most clothing, so basic food shopping and everyday apparel are tax-free.13Pennsylvania Department of Revenue. Pennsylvania Sales and Use Tax Guide Prepared foods, electronics, furniture, and most other retail goods are taxed at the full 6 percent.
Hotel Room Tax
Short-term lodging in Erie County carries a 7 percent hotel room tax on top of the 6 percent state sales tax.14Erie County, PA. Hotel Room Tax It applies to hotels, motels, and short-term rentals, and revenue is earmarked for tourism promotion and local development. A $150-per-night room ends up with $19.50 in combined hotel and sales tax added.
Realty Transfer Tax
When real property changes hands in Erie, the transaction triggers a realty transfer tax on the sale price or fair market value. Pennsylvania imposes a 1 percent state transfer tax on every deed recording.15Commonwealth of Pennsylvania. Realty Transfer Tax The local portion is split between the City of Erie and the Erie City School District and is capped at a combined 1 percent under the Local Tax Enabling Act.16eCode360. Erie Code – Article 373 Realty Transfer Tax Together, state and local transfer tax comes to 2 percent of the transaction value.
On a $200,000 home, that’s $4,000 in transfer tax. Buyers and sellers negotiate how to split the cost at closing, and a 50/50 split is common in many Pennsylvania deals. The Erie County Recorder of Deeds collects the full amount when the deed is recorded.15Commonwealth of Pennsylvania. Realty Transfer Tax
Common Exemptions
Not every transfer is taxable. Pennsylvania regulations exempt several categories from both the state and local tax:
- Transfers between spouses, including transfers tied to divorce.
- Transfers between lineal family members (parents, grandparents, children, grandchildren, and siblings).
- Transfers into a revocable living trust you control.
The full list of exemptions appears in Pennsylvania’s administrative code.17Legal Information Institute. 61 Pa Code 91.193 – Excluded Transactions One catch: if a family member receives property tax-free and then sells it to an unrelated buyer within one year, the transfer tax applies as though the original owner sold it directly.
Self-Employment and Federal Taxes
Federal tax sits on top of everything above. Self-employed Erie residents owe federal self-employment tax at a combined 15.3 percent on net earnings: 12.4 percent for Social Security and 2.9 percent for Medicare.18Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The Social Security portion applies only to the first $184,500 in earnings for 2026.19Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security? An additional 0.9 percent Medicare surtax applies to self-employment income above $200,000 (single) or $250,000 (married filing jointly). Self-employed residents still owe the 1.65 percent local earned income tax and 3.07 percent state tax on net profits, and quarterly estimated payments are the practical way to avoid federal underpayment penalties.
For 2026, federal income tax runs through seven brackets from 10 percent up to 37 percent, with the top rate starting above $640,600 for single filers and $768,700 for married filing jointly. The 2026 standard deduction is $16,100 (single) and $32,200 (joint).20Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill Stack federal income tax onto Pennsylvania’s 3.07 percent, Erie’s 1.65 percent, Social Security and Medicare, and the $52 local services tax, and you have the full picture of what an Erie paycheck actually carries.