Covington
Kenton County's occupational license guide lists Covington's quarterly employer payroll rate at 2.45%, in a table headed 2026 occupational license fee breakdown, and says payroll withholding within Covington is also subject to Kenton County's withholding, listed at 0.6997%. The guide says Covington businesses file and pay with both the city and Kenton County Business Services. Kentucky taxes residential and commercial cleaning, so state sales tax runs on your invoices too.
Covington payroll answers to two local governments: the city and Kenton County. This page covers the two payroll rates and the forms behind them, the business license, Kentucky sales tax on cleaning, the state wage, and what all of it means for your books. State payroll registration is on my Kentucky page.
The Kenton County Fiscal Court's occupational business license guide has a table headed 2026 occupational license fee breakdown. Its Covington row lists a $50 license fee, a quarterly employer payroll rate of 2.45% with a wage cap column that reads FICA CAP, and an annual rate of 2.5% on a basis the table labels Net, with a $100 minimum and an $80,000 maximum. Seven columns of rates and caps for one city is my kind of reading, which probably tells you I'm not much fun at parties. The table doesn't split resident and nonresident rates. Kenton County's row lists .006997, or 0.6997%, and the guide says any payroll withholding that occurs within Covington is also subject to the Kenton County withholding.
The guide shows no document date, and while this table is labeled 2026, other parts of the guide refer to 2024. The 2.45% rate wasn't confirmed on a City of Covington page for this one, and the guide doesn't mention a school or mental health component, so this page doesn't cover one.
Per the same guide, QCC1 is the Employee's Quarterly Withholding return, filed with Kenton County Business Services. KC-AR is the Annual Reconciliation of Payroll License Fees Withheld, filed on paper with Business Services, with payment to the Kenton County Fiscal Court. The guide also says Covington businesses must file and pay with both Covington and Kenton County Business Services.
Kenton County says the Covington-specific or countywide business license can be obtained through the City of Covington or through the Kenton County Fiscal Court's Business Services department. The latest city statement behind this page is a Finance Department news post from March 5, 2020, which said the OL-3 had to be filed by all businesses, with April 15 the deadline for most. That's the city's 2020 wording, and current wording wasn't confirmed for this page.
Kentucky taxes residential and commercial cleaning. KRS 139.200(2)(h), as effective August 1, 2026, covers janitorial services including residential and commercial cleaning, plus carpet, upholstery, and window cleaning. The Department of Revenue's janitorial FAQ says cleaning within restoration work is taxable too. The full conditions are on my Kentucky sales tax page.
Source: KRS 139.200 Imposition of sales tax (Kentucky General Assembly, as of August 1, 2026)
Source: Kentucky Department of Revenue, Janitorial Services FAQs (no revision date shown)
This page doesn't cover any Covington wage rule. Kentucky's minimum wage is $7.25 an hour, in effect since July 1, 2009, and the sources retrieved for this page, KRS 337.275 and the U.S. Department of Labor's state table, showed no announced change as of October 20, 2026.
Source: KRS 337.275 Minimum wage (Kentucky General Assembly)
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (2026-07-01)
Covington withholding and Kenton County withholding each get a liability account, apart from Kentucky withholding and from collected sales tax, since the guide sends filings and payments to both places. When the KC-AR reconciliation comes due, the county figure needs to stand on its own instead of sitting inside one blended local tax line. Wages are recorded at what each person is actually paid, and my payroll page covers that setup.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the city and county withholding and the sales tax in their own accounts; which rate applies to your payroll, whether the 2.5% annual rate reaches your company, and how the QCC1 and KC-AR get filed are questions for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Covington and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Covington payroll answers to the city and to Kenton County, so each local withholding gets an account that holds nothing else. Kentucky sales tax collected on cleaning sits in its own liability account, out of income. Book a short call below and walk me through how your Covington payroll is recorded now.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
Running crews in Covington and want the city and county withholding split apart before next quarter? Tell me how your payroll accounts look today. The first conversation doesn't cost anything.
