The Philadelphia, Pennsylvania Department of Revenue announced that effective July 1, 2019, the Philadelphia wage tax rates will decrease.? The rate as of July 1, 2019 for residents of Philadelphia decreases from 3.8809% to 3.8712%, and the rate for nonresidents of Philadelphia decreases from 3.4567% to 3.4481%.

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.

Employers must begin withholding at the new rates from paychecks issued after June 30, 2019.

Details on the Philadelphia wage tax

Philadelphia resident income tax withholding is required by any employer doing business in Pennsylvania without regard to whether 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.

For more information on the filing and payment of Philadelphia's wage tax, see the Department's website.

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