Philadelphia Wage Tax calculator.

The rates, and the date they change

Philadelphia levies its own Wage Tax and sets two rates: a higher one for residents and a lower one for nonresidents who work in the city. The City's Wage Tax page for employers publishes the rate by effective date, and the resident rate has slipped from 3.79% in July 2022 to 3.735% in July 2026, while the nonresident rate held at 3.44% through 2024 before easing to 3.43% and then 3.425%:

The employers' page also states the current rate in one line: 3.735% for residents of Philadelphia, or 3.425% for nonresidents. Because the rate changes on a July 1 date, a paycheck for the second half of a calendar year can be taxed at a different rate from the first half. That is why the calculator lets you choose the effective date.

Who owes the Wage Tax

The Wage Tax is a tax on salaries, wages, commissions and other compensation paid by an employer in return for work or services. The City says all employed Philadelphia residents owe it regardless of where they work, and that nonresidents who work in Philadelphia owe it too. Employers withhold it and file quarterly through the Philadelphia Tax Center; for 2026 the third quarter (July 1 to September 30) is due October 31, and the fourth quarter (October 1 to December 31) is due February 1, 2027. Annual reconciliations are no longer required, and the fourth quarter counts as the final reconciliation.

Net Profits Tax for the self-employed

If you run a business, practice a profession or rent property in Philadelphia, the Net Profits Tax applies to your net profit rather than to wages. For tax year 2025, due April 15, 2026, the rates are 3.74% for residents and 3.43% for nonresidents. A resident owes it even if the business operates outside Philadelphia, and a nonresident owes it on business conducted in the city. Sole proprietors, partnerships, associations, LLCs and estates or trusts are covered, rental of property is in most cases treated as operating a business, and a return is required even if there is a loss. Estimates are due in installments, with the second due June 15. The City adds that the Net Profits Tax does not replace the net income part of the Business Income and Receipts Tax, although a credit against the Net Profits Tax may be available for BIRT paid on that part.

Worked examples (hypothetical pay, real rates)

Resident employee. Annual pay of $65,000 at the 3.735% resident rate is $2,427.75 of Wage Tax a year. The same pay at the 3.425% nonresident rate is $2,226.25, so living in the city costs $201.50 more on that pay.

Rate step. On $100,000 of pay, the move from 3.74% to 3.735% on July 1, 2026 changes the tax from $3,740 to $3,735, a $5 difference. The change is small, but payroll systems must update on the date.

Freelancer. A resident with $40,000 of net profit at 3.74% owes $1,496.00 of Net Profits Tax for tax year 2025. A nonresident with the same profit earned in the city owes $1,372.00 at 3.43%. Nothing is withheld, so the amount is covered by estimated payments and the annual return.

Where the state paycheck calculators stop

The Pennsylvania Department of Community and Economic Development explains how Act 32, the state's local earned income tax law, treats Philadelphia: employers withhold the Philadelphia resident rate for an employee who lives and works in Philadelphia, and for one who lives in Philadelphia but works elsewhere in Pennsylvania; they withhold the nonresident rate for someone who works in Philadelphia but lives outside it. Act 32 itself does not apply to those cases and the money goes to the Department of Revenue. The Pennsylvania paycheck calculator on this site does not look up local taxes, and instead has an optional box for a combined local earned income tax rate. For a Philadelphia resident, enter 3.735 there, or use the tax figure from this page as a separate line. For everyone else in the state, the Pennsylvania PSD code and EIT rate checker explains which rate applies.

Common mistakes

• Using an old rate. Several calculators still show 3.75% or 3.74%. The City's table shows 3.735% from July 1, 2026.
• Assuming nonresidents pay nothing. A nonresident who works in the city owes the Wage Tax at the lower rate.
• Forgetting the Net Profits Tax on side income. Wage Tax withholding does not cover freelance or rental profit.
• Treating this as an Act 32 rate. Philadelphia is handled separately from the rest of Pennsylvania.

Who this is for, and what it does not cover

It is for employees and self-employed people estimating Philadelphia's two income-based taxes. It does not cover credits for taxes paid to other localities, the School Income Tax, the Earnings Tax, employer filing, refunds, or how remote work changes who owes the tax. Check the City's pages for those.

FAQ

What is the Philadelphia Wage Tax rate in 2026?

From July 1, 2026 the Wage Tax rate is 3.735% for residents of Philadelphia and 3.425% for nonresidents. Before that, from July 1, 2025, it was 3.74% and 3.43%.

Do nonresidents pay Philadelphia Wage Tax?

Yes. The City says nonresidents who work in Philadelphia must pay the Wage Tax, at the lower nonresident rate.

Do Philadelphia residents pay the Wage Tax if they work outside the city?

Yes. The City says all employed Philadelphia residents owe the Wage Tax regardless of where they work, and the DCED notes employers withhold the Philadelphia resident rate for a resident who works elsewhere in Pennsylvania.

When does the Philadelphia Wage Tax rate change?

The City publishes rates by effective date and the changes have taken effect on July 1: 3.79% in 2022, 3.75% in 2023 and 2024, 3.74% in 2025 and 3.735% in 2026 for residents.

What is the Philadelphia Net Profits Tax rate?

For tax year 2025, due April 15, 2026, it is 3.74% of net profits for residents and 3.43% for nonresidents who conduct business in Philadelphia.

Who has to pay the Net Profits Tax?

Residents on business net profit wherever the business operates, and nonresidents on business conducted in the city. Sole proprietors, partnerships, LLCs, associations and estates or trusts are covered, and rental of property is in most cases treated as a business.

Does Pennsylvania Act 32 apply to Philadelphia?

Not for these cases. The DCED says Philadelphia employers withhold the Philadelphia resident or nonresident rate and remit directly to the Department of Revenue.

How often are Wage Tax returns due?

Employers file quarterly through the Philadelphia Tax Center. For 2026 the due dates are April 30, July 31, October 31, and February 1, 2027 for the fourth quarter.

Sources

Retrieved 2026-10-20. Each link was opened and checked against the claim next to it.

• City of Philadelphia: Wage Tax (employers): Resident 3.735% and nonresident 3.425% rates, rate table by effective date from 2022, who pays, quarterly due dates, no annual reconciliation.
• City of Philadelphia: Net Profits Tax: Tax year 2025 rates of 3.74% and 3.43%, who pays, April 15 and June 15 dates, BIRT relationship.
• Pennsylvania DCED: Local Withholding Tax FAQs: How Act 32 treats Philadelphia residents and workers.