Business & self-employment

Wage Tax (employers)

Due date

The Wage Tax must be filed and paid on a schedule that corresponds with how much money is withheld from employees’ paychecks. See below to determine your filing frequency.

Tax rate
3.8907%

for residents of Philadelphia, or 3.4654% for non-residents

Who pays the tax

The City Wage Tax is a tax on salaries, wages, commissions, and other compensation. The tax applies to payments that a person receives from an employer in return for work or services. All Philadelphia residents owe the City Wage Tax, regardless of where they work. Non-residents who work in Philadelphia must also pay the Wage Tax.

Employers

All employers located in Pennsylvania are required to register with the City of Philadelphia within 30 days of becoming an employer of either:

  • A resident of Philadelphia, or
  • A non-resident of Philadelphia who performs services for an employer in Philadelphia.

Employers are required to withhold the Wage Tax from all employees who meet these criteria.

Employers and payroll service companies must also submit W-2s to the City of Philadelphia. Refer to our W-2 submission guidelines for details.

Payroll Service Companies

Payroll services that remit Philadelphia Wage Tax payments for their clients are required to make these payments electronically by either ACH Credit or Debit. You should obtain your client’s established City Wage account numbers and filing frequencies upon enrollment. A client who does not have a City Wage account number must register for one through the City’s eFile/ePay website.

Payroll service companies must follow Revenue file specifications when remitting returns. Download the payroll specification document for the requirements.

Those who don’t have tax withheld

You must register for an Earnings Tax Account if:

  • You are a resident of Philadelphia or a non-resident who works in Philadelphia, and
  • Your employer is not required to withhold the Wage Tax.

You can register for an Earnings account on the City’s eFile/ePay website using your Social Security Number. Learn more on the Earnings Tax page.

Important dates

Filing Frequency Determination

If you are an employer, your filing frequency is determined by the amount of Wage Tax you withhold.

Amount you withhold How often you must file Wage Tax returns
Less than $350 per month Quarterly
More than $350 but less than $16,000 per month Monthly
$16,000 or more per month (bi-monthly payroll deductions) Semi-monthly
$16,000 or more per month Weekly

Semi-monthly and weekly filers must send their wage tax payments electronically through Automated Clearing House (ACH) Debit or Credit. Learn more from the Pay Taxes page.

Non-Payroll Periods

If you do not have payroll for a reporting period, you must submit a zero payment return or visit the E-File page to report your NTL (No Tax Liability) indicating no tax due to prevent a non-filer notice. Any period without a filed return will be classified as a non-filer. As a result, court filings and fines will be imposed upon the taxpayer. Employers with active wage accounts and no Philadelphia wage withholding should complete a change form to cancel the wage account.

Tax rates, penalties, & fees

How much is it?

Effective July 1, 2017:
3.8907% for Philadelphia residents
3.4654% for non-residents

July 1, 2016—June 30,2017:
3.9004% for Philadelphia residents
3.4741% for non-residents

July 1, 2015—June 30, 2016:
3.9102% for Philadelphia residents
3.4828% for non-residents


What happens if you don't pay on time?

Interest is due on any unpaid taxes at the rate specified by Philadelphia Code 19-509. In addition, penalty will be due at the rate of 1.25% for each month the tax remains unpaid.

For more information about interest and penalty rates, visit the interest, penalties, and fees page.

Discounts & exemptions

Are you eligible for a discount?

Income-based Wage Tax refund

If you’re approved for tax forgiveness under Pennsylvania 40 Schedule SP, you may be eligible for an income-based Wage Tax refund. People who meet the criteria can receive a refund of up to 0.5% on City Wage Taxes that their employer withheld from their paychecks.

How to apply the reduction

You must attach a completed Pennsylvania Schedule SP for tax year 2016 to your refund petition to be eligible to receive the income-based rates. The City of Philadelphia will check to make sure your Schedule SP matches the state’s records.

Non-Pennsylvania residents who work in Philadelphia but do not file a Pennsylvania income tax return must include a signed copy of their state income tax return to be eligible for the income-based rates.

Refunds for time worked outside Philadelphia

If you pay more Wage Tax than is due, you can file a claim to have the excess amount refunded to you. This might happen if you’re a non-resident and your employer withholds Wage Tax for time you spent working outside Philadelphia. To receive that portion of Wage Tax back, you’ll need to request a refund.


Can you be excused from paying the tax?

Some forms of income are exempt from the Wage Tax. These include:

  • A scholarship received as part of a degree program, for which you do not provide a service
  • Pension payments
  • Worker’s compensation
  • Active military service pay and bonuses
  • Death benefits
  • Employer-paid health insurance premiums
  • Witness and juror fees

How to pay

If you are an employee of a company located in Pennsylvania, Wage Tax will be automatically withheld from your paycheck and paid by your employer to the City of Philadelphia.

If you are an employer, you will need to file and pay Wage Tax according to a schedule that corresponds with the amounts you withhold. If you use an outside payroll service, you must file and pay the tax electronically.

Weekly & semi-monthly filers

Must remit payment electronically via ACH Debit or Credit.

Monthly & quarterly filers

Mail payments with coupons to:

Philadelphia Dept. of Revenue
P.O. Box 8040
Philadelphia, PA 19105-8040

Annual reconciliations

Mail to:

Philadelphia Dept. of Revenue
P.O. Box 1670
Philadelphia, PA 19105-1670

Tax code

01

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