Louisville
Louisville's local difference is the occupational license tax on wages. The Louisville Metro Revenue Commission's Form W-1 instructions list 2.2% for residents and 1.45% for nonresidents, withheld by employers on pay for work within Louisville/Jefferson County and reported on the quarterly W-1. Kentucky taxes residential and commercial cleaning, so state sales tax still runs on your invoices.
If you employ cleaners in Louisville, there's a local layer on payroll and a Revenue Commission registration that comes with it. This page walks through both, then Kentucky sales tax on cleaning and what it all means for your books. State payroll registration and the minimum wage are on my Kentucky page.
The Revenue Commission's W-1 instructions list the rates employers withhold at 2.2% for residents and 1.45% for nonresidents, and tell employers to multiply wages subject to the school boards tax by .0075. Reading tax instructions is about as exciting as my weekends get, and that multiplier still made me read the line twice. The instructions don't give an effective tax year for the rates. Tax remitted "during each month of the quarter" is reported on the quarterly Form W-1, which covers work within Louisville/Jefferson County. The Commission's FAQ describes a separate OL-3 as an annual tax based on a business's net profits; the pages behind this one don't state its rate.
Source: Louisville Metro Revenue Commission, Form W-1 Tax Form Instructions
Source: Louisville Metro Revenue Commission, Form W-1 (Quarterly Withholding Return)
Source: Louisville Metro Revenue Commission, Frequently Asked Questions
Per the Revenue Commission's FAQ, there's no separate local business license. New businesses do have to register with the Louisville Metro Revenue Commission for an occupational license tax account, and sole proprietors have to register for an Occupational License tax account as well.
Source: Louisville Metro Revenue Commission, Frequently Asked Questions
Residential and commercial cleaning are both taxable under KRS 139.200(2)(h), as effective August 1, 2026, along with carpet, upholstery, and window cleaning. The Department of Revenue's janitorial FAQ adds that cleaning within restoration work is taxable. The rest of the conditions are on my Kentucky sales tax page.
Source: Kentucky General Assembly, KRS 139.200 Imposition of sales tax (effective August 1, 2026)
Source: Kentucky Department of Revenue, Janitorial Services FAQs
Withheld occupational license tax goes to its own liability account, kept apart from Kentucky withholding and split by resident and nonresident rate. Sales tax collected on taxable cleaning sits in a separate liability account and never counts as revenue. Payroll gets recorded at the wage you actually pay; my payroll page covers how.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the local withholding and the sales tax in their own accounts; which rate applies to an employee, and how the W-1 and OL-3 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 Louisville 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
Louisville adds a local withholding to pay for work in Louisville/Jefferson County, at one rate for residents and another for nonresidents. That withholding gets a liability account of its own, separate from Kentucky's, and collected sales tax stays out of your income. Book a short call below and show me how your Louisville payroll runs today.
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 Louisville and want the local tax out of your general payroll line? Tell me how payroll is set up now. The first conversation doesn't cost anything.
