Wage-deduction statements
A covered employer with ten or more employees that makes wage deductions must furnish a paper or electronic statement showing the amount of each deduction and its general purpose.
See details →KENTUCKY PAYROLL RESOURCES · KY · REVIEWED 2026-10-03
Kentucky Payroll &
Pay Statement Guide
Review Kentucky wage-deduction statement rules, 2026 withholding resources, workers’ compensation, local occupational taxes, and official employer guidance. Run payroll for a small team and get employee statements from every calculated run.
10+ employee deduction-statement ruleCovered employers furnish a paper or electronic statement identifying each deduction and its general purpose.
Local occupational taxes matterKentucky payroll can require city or county withholding in addition to state withholding.
Reviewed 2026-10-03Checked against current Kentucky and local government sources.
AT A GLANCE
What distinguishes Kentucky pay-period records
Kentucky’s state wage-deduction statement rule is narrower than a universal detailed pay-stub mandate. KRS 337.070 applies to employers with ten or more employees that make deductions from salaries or wages. At the time of payment, the covered employer must furnish a paper or electronic statement identifying the amount of each deduction and the general purpose for which it is made. Kentucky payroll can also be unusually local because cities and counties may impose occupational license taxes or related payroll withholding.
State income tax withholding
Use Kentucky’s current 2026 withholding tax tables and computer formula. The current tables reflect a 3.5% state-rate structure within the withholding calculation rather than a generic flat-paycheck shortcut.
View 2026 withholding tables →Local occupational taxes
Kentucky payroll often includes city or county occupational-license withholding. Louisville Metro, for example, applies different resident and nonresident rates to covered compensation earned in the jurisdiction.
View Louisville instructions →Workers’ compensation
Kentucky generally requires workers’ compensation coverage when an employer has one or more employees subject to the Act, with statutory exemptions and election rules for particular workers or entities.
View employer responsibilities →STATE PAYROLL OVERVIEW
What makes Kentucky different from other pay-statement jurisdictions
Kentucky’s state statement rule turns on both employer size and deductions. KRS 337.070 applies to employers that employ ten or more people and make deductions from wages or salaries. When the rule applies, the employee receives a paper or electronic statement at the time of payment showing the amount of each deduction and the general purpose of the deduction. If the statement is electronic, the employer must provide access to a computer and printer for the employee to review and print it.
That is not the same as a universal statutory requirement listing hours, gross wages, net wages, pay-period dates, employer address, and every other field commonly associated with a modern pay stub. A LeoFolio page should preserve that distinction while still encouraging a clear, professional payroll record.
Kentucky’s strongest payroll complexity often comes from local occupational-license taxes. Employers can face different withholding rules depending on the city or county where the employee works. Louisville Metro is a clear example: current city instructions show a 2.2% resident rate and 1.45% nonresident rate for covered occupational-tax wages. Work location therefore matters even when the state deduction-statement rule is unchanged.
PAYROLL REQUIREMENTS CHECKLIST
The Kentucky requirements checklist
Confirm employee-count coverage
Determine whether the employer has ten or more employees. KRS 337.070’s deduction-statement requirement is written for employers at or above that threshold that make wage or salary deductions.
Information to include
When the rule applies, state the amount of each deduction and the general purpose for which the deduction is made.
Electronic delivery
Kentucky permits an electronic statement, but the employer must provide the employee access to a computer and printer for review and printing.
Other employer obligations
Apply current Kentucky withholding, unemployment, workers’ compensation, and applicable city/county occupational taxes separately from the state deduction-statement requirement.
PAYROLL RECORDS IN PRACTICE
How Kentucky treats the statement after payday
Paper or electronic statement
KRS 337.070 expressly permits either paper or electronic delivery for the covered deduction statement. If the employer chooses electronic delivery, the employee must have access to a computer and printer for review and printing.
Supporting payroll records
The deduction statement should reconcile to the employer’s actual payroll records. Maintain enough documentation to support wages, deductions, state withholding, local occupational withholding, unemployment reporting, workers’ compensation payroll, and payment history for the retention periods that apply under each program.
USE CURRENT KENTUCKY TABLES — AND CHECK LOCAL WITHHOLDING
Kentucky payroll can require both state and local withholding
Use Kentucky’s current Department of Revenue withholding tables or computer formula for state withholding. Then separately determine whether the employee’s work location creates a city or county occupational-license tax obligation. Do not combine the two concepts into one generic “Kentucky tax rate.”
LOCAL CONSIDERATIONS
Kentucky payroll is unusually sensitive to city and county occupational taxes
Kentucky allows local occupational-license taxes, making work location an important payroll input. Employers should not assume the state withholding calculation completes the payroll-tax analysis.
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Louisville MetroCurrent Louisville Metro Revenue Commission instructions identify a 2.2% resident rate and a 1.45% nonresident rate for covered occupational-tax wages. The tax is tied to compensation subject to Louisville Metro’s rules, and work performed outside the jurisdiction can affect the calculation.Official source
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Lexington-Fayette and other localitiesLexington-Fayette and other Kentucky cities or counties may maintain their own occupational-license tax systems. Confirm the current local rate, wage base if any, exemptions, and filing process directly with the jurisdiction before finalizing payroll.
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Resident versus nonresident treatmentSome Kentucky local systems distinguish between residents and nonresidents or between work performed inside and outside the jurisdiction. Track the employee’s work location rather than relying only on the employer’s address.
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Remote and multi-jurisdiction workWhen an employee works in multiple local jurisdictions, retain enough time or work-location information to support the local occupational-tax allocation.
A SOURCE-BACKED WORKFLOW
A source-backed workflow for Kentucky payroll records
1Confirm state statement coverageDetermine whether the employer has ten or more employees and is making wage deductions.›
2Confirm work locationIdentify the city and county in which the employee performs services and whether occupational withholding applies.›
3Enter payroll detailsAdd wages, hours or salary, deductions, state withholding information, and local tax inputs.›
4Review and generateReview Kentucky and local calculations, then complete the Pay Run.›
5Retain supporting recordsKeep documentation supporting state deductions, local occupational taxes, unemployment, workers’ compensation, and wage payments.›
BUILT FOR REVIEWABLE PAYROLL
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Review before completion
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OFFICIAL KENTUCKY SOURCES USED FOR THIS PAGE
Official Kentucky sources used for this page
01
Kentucky Revised Statutes · KRS 337.070
Primary authority for the ten-or-more-employee deduction-statement rule and electronic access requirement.
02
Kentucky Department of Revenue · 2026 Withholding Tables
Current state withholding tables and computer formula.
03
Kentucky Workers’ Compensation · Employer Responsibilities
Official employer coverage and workers’ compensation responsibilities.
04
Louisville Metro Revenue Commission · Occupational Tax Instructions
Official local wage-allocation and occupational-tax rate guidance.
RESEARCH & REVIEW
Built from primary sources. Reviewed for accuracy.
This page is built from primary Kentucky state and local government sources and is periodically reviewed against current agency guidance. We use Kentucky statutes, Department of Revenue tables, workers’ compensation resources, and official local occupational-tax instructions whenever available.
FREQUENTLY ASKED QUESTIONS
Kentucky pay-statement FAQ
Does Kentucky require every employer to issue the same itemized pay stub?
No. KRS 337.070 specifically applies to employers with ten or more employees that make deductions from wages or salaries. Covered employers must furnish a paper or electronic statement showing the amount and general purpose of each deduction.
What if the Kentucky employer uses electronic statements?
The statute permits electronic statements, but the employer must provide access to a computer and printer for the employee to review and print the statement.
Does Kentucky require gross and net wages on the statement under KRS 337.070?
The cited provision specifically requires the amount of each deduction and the general purpose of the deduction. A professional payroll record may include additional wage information, but the page should not present those extra fields as though KRS 337.070 expressly lists them.
How is Kentucky income tax withheld in 2026?
Employers should use the current Kentucky withholding tables or computer formula. The 2026 materials reflect the current state-rate structure and payroll-period calculations rather than a generic one-step percentage for every situation.
Why do local taxes matter so much in Kentucky payroll?
Cities and counties can impose occupational-license taxes on compensation. Louisville Metro, for example, currently publishes a 2.2% resident rate and 1.45% nonresident rate for covered wages. Other jurisdictions use their own rules and rates.
Does Kentucky workers’ compensation apply to a one-employee business?
Kentucky generally requires coverage for employers with one or more employees subject to the Act, although exemptions and special elections can apply. Check the official employer-responsibilities guidance for the specific business.
ACCURATE RECORDS. SUPPORTING EVIDENCE.
Use accurate records, review the preview, and keep the supporting evidence.
Prepare a Kentucky Pay Run, review state and local payroll calculations before completion, and keep the applicable Kentucky sources with your payroll workflow.