Lancaster to New Holland Borough
Pennsylvania Act 32 local earned income tax · LANCASTER to LANCASTER County · tax year 2026
Home rate
1.6%
Lancaster, residents
Work rate
1%
New Holland Borough, non-residents
You pay
1.6%
the higher of the two
Cost of the commute
$0
a year, above the home rate
What this commute costs you
no extra local taxLancaster already charges its residents more than New Holland Borough charges commuters, so the home rate governs and the job adds nothing at all. You pay the solid bar only — Pennsylvania charges the higher of the two rates, never their sum. Local earned income tax only; state, federal and payroll tax apply on top.
What this commute actually costs
- Live in Lancaster, work in New Holland Borough, and your local tax is your home rate: about 1.6%. That is $960 a year on a sixty-thousand salary. The work location adds nothing. Pennsylvania charges whichever rate is higher, and yours already is.
- Not many people do this journey. New Holland Borough is 7 of 7 destinations for Lancaster residents, with roughly 506 making the trip. Same rule, fewer people.
- Residence controls this pairing: Lancaster levies about 1.6% on residents, at or above New Holland Borough's non-resident rate, so the outcome is the resident rate — about 1.6%, or $960 at the reference salary. Employers still withhold against the work location's collector, but the amount is unchanged and the residence is the ultimate recipient.
- New Holland Borough ranks 7 of 7 destinations for Lancaster, carrying 506 workers. Flows in the lower band still reflect real employment links, but the aggregate fiscal consequence of the rate outcome here is correspondingly limited.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$2,303
- Yours$59,290
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax3.07% | $2,303 |
| Yours79.05% | $59,290 |
The arithmetic, side by side
| If you worked in Lancaster | $960 |
|---|---|
| Working in New Holland Borough | $960 |
| Difference | $0 |
On a reference salary of $60,000 a year. The local tax is flat, so every figure scales with your own pay.
What this page does not cover
- One thing worth being clear about, because it catches people out. You are not charged by both places. Lancaster and New Holland Borough do not add their rates together. Pennsylvania picks the higher of the two, and that is what you pay. Adding them would roughly double the bill.
- Everything here is the local earned income tax and nothing else. State income tax applies on top, as do federal tax and Social Security. None of those change when you cross a municipal line between Lancaster and New Holland Borough. This page is about the layer that does.
- All the dollar amounts rest on one assumed salary. It is stated rather than measured, because nobody publishes average pay for Lancaster. The local tax is a flat percentage. Scale every figure to your own salary and the New Holland Borough conclusion holds.
- A postal address in Lancaster does not prove which municipality taxes you. Boundaries and postcodes disagree often enough here that the state publishes a lookup. Philadelphia is a special case too. Its wage tax sits outside the rules that govern New Holland Borough.
- Pennsylvania's local rule is a greater-of rule, not an additive one: the liability for a Lancaster resident working in New Holland Borough is the higher of the two applicable rates, not their sum. The distinction is worth stating plainly because the additive reading is intuitive and would overstate the charge by roughly a factor of two. What is divided between the municipalities is the remittance, not the worker's liability.
- Figures cover the local earned income tax exclusively. Pennsylvania's flat state income tax, federal income tax and FICA apply in addition and are invariant to the Lancaster–New Holland Borough municipal boundary, which is precisely why they are excluded: isolating the layer that responds to the commute is the point of the comparison.
- Monetary figures derive from a single stated salary assumption; no published wage series covers Pennsylvania municipalities such as Lancaster. The flat structure of the local tax means the New Holland Borough comparison is scale-invariant, so the rate difference rather than the dollar difference is the transferable result.
- Municipal taxing jurisdiction is determined by boundary rather than by postal address, and the two diverge frequently enough in Pennsylvania that the DCED lookup should be treated as authoritative for Lancaster. Philadelphia is additionally outside this regime, administering its own wage tax on residents and non-residents under separate authority, so it does not follow the treatment described for New Holland Borough.
Questions people ask
Do I pay local tax twice — once where I work and once where I live?
Only once, at the higher rate. Between Lancaster's about 1.6% and New Holland Borough's about 1%, the larger governs — the two are never added together.
Does working in a different town cost me anything?
Nothing extra. The tax is redirected rather than increased, so this particular crossing costs you no more than working in Lancaster would.
Which town's rate am I actually paying?
Lancaster sets it. Your residence rate is the larger, so it governs regardless of where the job is.
Is this commute common enough for the numbers to mean anything?
It is a smaller route: 506 workers. That affects how representative it is, not whether the tax arithmetic applies — the rules are the same on a quiet road as a busy one.
How does Pennsylvania's local earned income tax law allocate liability between two districts?
Pennsylvania's local earned income tax law assigns the higher of the residence rate (about 1.6%) and the non-resident work rate (about 1%); liabilities are never summed. The employer withholds at the governing rate and remits through the work district's collector, which then distributes to the residence district.
Why is the marginal cost of this crossing zero?
Marginal liability from working outside the residence jurisdiction is zero on this route. The crossing alters the distribution of revenue between jurisdictions but not the employee's total. ⚠️ This is route-specific and does not generalise to other pairs in the same dataset.
Which district's rate governs on this route?
The residence rate equals or exceeds the work district's non-resident rate and therefore governs. Working outside the residence district does not increase employee liability on this route; it affects only inter-district distribution.
What is the measurement basis for a route of this size?
Route volume is 506 workers per Census LODES, above the publication floor but below the dataset's upper quartile. Liability is determined by jurisdictional rates and residence rules alone; commuter volume has no bearing on it and is reported only as context.