Cost of Living in Pennsylvania
Things cost about the same here as the national average.
What Things Cost in Pennsylvania
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Pennsylvania offers one of the lowest flat income tax rates in the country at 3.07%, combined with a cost of living right at the national average. Pittsburgh has become a poster child for affordable revitalization: a city that transformed from steel to healthcare, tech, and education (Carnegie Mellon, University of Pittsburgh) while keeping housing costs that would make coastal residents weep. Philadelphia is a major city with history, culture, healthcare systems, and a food scene that deserves more recognition, all at prices well below New York or Boston. Between the two metros lies a vast middle of the state that is genuinely rural and deeply affordable.
Pennsylvania at a Glance
Taxes in Pennsylvania
Pennsylvania's state income tax tops out at 3.07% flat. The combined sales tax averages 6%. Property taxes run about 1.36% of home value, which on a $245,000 median home means roughly $3,332/year.
Cities in Pennsylvania
Ranked from least to most expensive. Index 100 = national average.
Explore Pennsylvania
FAQ About Pennsylvania
Remarkably so. Pittsburgh has median home prices around $220,400, and desirable neighborhoods like Lawrenceville, Squirrel Hill, and Mt. Lebanon range from $250,000 to $400,000. For a city with multiple major universities, world-class healthcare, a growing tech sector, and professional sports, the cost of living is exceptional. The local wage tax (about 3%) and relatively high property taxes are the main financial drawbacks.
From a tax perspective, Pennsylvania is one of the best states for retirees. It does not tax any retirement income: Social Security, pensions, 401(k) withdrawals, and IRA distributions are all exempt from state income tax. The flat 3.07% rate on earned income is low, and property taxes, while above average, can be managed by choosing a lower-cost county. The combination of zero retirement income tax and moderate cost of living is hard to beat.
Philadelphia residents pay the 3.07% state income tax plus a city wage tax of about 3.75%, for a combined rate of roughly 6.82% on earned income. Non-residents who work in Philadelphia pay a slightly lower city rate. This combined rate is significantly higher than the state rate alone and is an important factor for anyone considering living or working in the city.