Pennsylvania workers who earn tips or rely on overtime pay might soon see more money in their pockets. A new bill introduced by state lawmakers could eliminate state income taxes on both tips and overtime wages.
This move is being led by State Representative Mike Cabell. According to him, the goal is simple—help working-class Pennsylvanians keep more of what they earn.
Many people who work in restaurants, hospitality, or hourly wage jobs often depend on tips and overtime to make ends meet. However, these extra earnings are currently taxed just like regular income. If the new bill is passed, it would change that.
Cabell explained that the legislation is meant to reward hard work. People who put in extra hours or go the extra mile for customers should be able to keep more of their earnings, not lose a big chunk to taxes. He said that removing the state income tax from these earnings is one way to ease financial stress and help families deal with the rising cost of living.
The bill has support from several Republican lawmakers. They say that ending taxes on these specific parts of workers’ paychecks could give some much-needed relief to employees across Pennsylvania.
Cabell also mentioned that many workers often don’t have control over how many hours they work or whether they get tips, so taxing those earnings adds extra pressure on them.
At the same time, not everyone is sure how the state will manage the possible loss of revenue. While the proposed bill would only remove state-level taxes—not federal ones—it could still reduce the amount of money Pennsylvania collects. Lawmakers will have to decide whether the benefit to workers is worth the budget impact.
If the bill becomes law, it could set a new trend for other states to follow. For now, Pennsylvania residents and business owners are watching closely to see how lawmakers move forward.
Many are hopeful that this change could be a step toward fairer pay for those who rely on long hours and customer tips to get by.
Supporters of the bill believe it could boost morale in industries like food service, healthcare, and retail—sectors where tips and overtime are a major part of income. It could also make Pennsylvania more attractive for workers and help reduce employee turnover in those fields.
Right now, the bill is still in the early stages and needs to go through the legislative process. But if passed, it could bring meaningful financial change for thousands of people across the state.