28 June 2018 Philadelphia, Pennsylvania wage tax rates decrease as of July 1, 2018 The Philadelphia, Pennsylvania Department of Revenue announced that effective July 1, 2018, the Philadelphia wage tax rates will decrease. The rate as of July 1, 2018 for residents of Philadelphia decreases from 3. 8907% to 3. 8809%, and the rate for nonresidents of Philadelphia decreases from 3.4654% to 3.4567%. The City of Philadelphia wage tax is a tax on salaries, wages, commissions and other compensation paid to an employee who is employed by or renders services to an employer. Covered wages follow those that apply for Pennsylvania income tax purposes with certain exceptions noted in the Philadelphia regulations. Philadelphia resident income tax withholding is required by any employer doing business in Pennsylvania, whether or not business is conducted within Philadelphia. Philadelphia's wage tax is unique from other Pennsylvania locals that require resident income tax withholding only from employers doing business within their municipalities. With limited exception, nonresidents who perform services in Philadelphia are also subject to the wage tax. This tax is referred to as an earnings tax if an employer does not collect the wage tax on an individual's behalf. In this case, an individual pays earnings tax directly to the City. Individuals must register for an earnings tax account if they are a resident of Philadelphia or a non-resident who works in Philadelphia, and their employers are not required to withhold the wage tax. Philadelphia's Net Profits Tax (NPT) and School Income Tax (SIT), which mirror the wage tax, are also 3.8809% for residents and 3.4567% for non-residents effective July 1, 2018. The SIT applies only to resident of Philadelphia.
Document ID: 2018-1317 | ||||||||||||||
